DISCLAIMER: THIS IS NOT A STOCK RECOMMENDATION.
I WILL BE GLAD TO RECEIVE ANY SUGGESTIONS TO MAKE MY ANALYSIS BETTER.
Today , im talking about MANAPURRAM FINANCE LTD.
It has given a breakout today with fairly high volumes . Let's talk about its business and Financials.
Manappuram is a kerala based NBFC. It deals majorly in gold loans which makes 70% of revenue. The other 30% comes from microfinance , housing finance loans and vehicle loans.
Now on to Financials,
. The company is trading at a low PE of 8.14 much lower than the industry PE.
. It's trading at its book value price whereas it's peers with same business trade at prices
much higher than the book value.
. ROE and ROCE are good.
. Company is posting good profits . The financing margin shrank for the year 21-22 . I assume it maybe an impact of global scenario. The gold prices also went down during this time.
. The company has a strong balance sheet .
. I didn't find NPA . I assume they just sell and recover the NPA from gold so there is no mention of it. ( educate me if I'm missing something)
Now on the chart,
The stock price has given a breakout today from a cup and handle pattern . The target price of the cup and handle would be around 160 . Buy price should not be more than 135.
I personally think a stock trading at such a low PE of 8 while it's peers are at 25 . It has a potential of doubling and even tripling. The stock made a high of 212 rupees previously so my personal target is 212 . It can take 2 years to reach the target price but will give a gain of almost 100%.
Thank you.
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