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Manappuram Finance shares hit 2-year low after brokerage firms slash target price post Q4 results

Manappuram Finance shares hit 2-year low after brokerage firms slash target price post Q4 results

Manappuram Finance shares hit 2-year low after brokerage firms slash target price post Q4 results
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By CNBCTV18.com May 19, 2022 2:37:25 PM IST (Updated)

Manappuram Finance share price: Shares of Manappuram Finance nosedived around 12 percent on Thursday as the company posted a dismal set of quarterly numbers, following which some brokerage firms slashed their target price on the gold financier’s stock. CLSA and Nirmal Bang Institutional Equities have trimmed their target price on the gold loan company's shares.

Shares of Manappuram Finance nosedived around 12 percent on Thursday as the company posted a dismal set of quarterly numbers, following which some brokerage firms slashed their target price on the gold financier’s stock.

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At 1228 IST, the gold loan company's shares were trading at Rs 93.80, down 10.3 percent, on the NSE. It was the biggest loser on Nifty500.
The stock, that has been falling for the last two days, was down 11 percent on the BSE at Rs 93.15.
Manappuram Finance, share price, stock market india The gold loan company's stock hit a two-year low at Rs 91.85 on the NSE today. (Source: NSE)
Manappuram Finance reported a 44 percent year-on-year (YoY) decline in its net profit for the March quarter to Rs 261 crore while revenue dropped 9 percent to Rs 1,480 crore.
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On the asset quality front, gross non-performing asset (GNPA) ratio in the company's gold business stood at 3 percent as against 1.4 percent in the previous quarter.
"Our PAT (profit after tax) has been affected temporarily due to shifting of high yield to lower yielding gold loans. We have reduced Opex (operating expenses) during this quarter and we intend to maintain it at this level. We are focusing more on collection efficiency and quality growth in MFI books and building up gold loan portfolio," Manappuram Finance said in an investor presentation.
Manappuram Finance had a muted quarter for growth and profitability. Its loan book for both its gold loan and microfinance business contracted marginally QoQ, CLSA pointed out.
The brokerage firm has trimmed its net profit estimates for FY23 and FY24 by 6-12 percent on the back of lower growth and margins.
“We expect the company to deliver a 14%-15% ROE over the medium term. We maintain our O-PF rating primarily on an undemanding valuation, but lower our target price from Rs 140 to Rs 120,” CLSA said.
Nirmal Bang Institutional Equities has maintained its 'buy' rating on the stock with a lower target price of Rs 166. The domestic brokerage firm added that it continues to prefer Muthoot Finance over Manappuram Finance due to the former's stronger business model.
 
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