Buy Manappuram Finance, target price Rs 150: Motilal Oswal Financial Services

Motilal Oswal Financial Services has buy call on Manappuram Finance with a target price of Rs 150. The current market price of Manappuram Finance is Rs 118.95.

Manappuram Finance, incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 10105.95 Crore) operating in NBFC sector.

Manappuram Finance key Products/Revenue Segments include Interest, Other Operating Revenue, Fees & Commission Income for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 1734.52 Crore, up 1.19 % from last quarter Total Income of Rs 1714.12 Crore and up 15.11 % from last year same quarter Total Income of Rs 1506.85 Crore. Company has reported net profit after tax of Rs 393.49 Crore in latest quarter.

The company’s top management includes Mr.Shailesh Jayantilal Mehta, Mr.V P Nandakumar, Mr.Abhijit Sen, Mr.Gautam Narayan, Mr.P Manomohanan, Mr.V R Ramachandran, Mr.Harshan Kollara, Mr.S R Balasubramanian. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-12-2022, the company has a total of 85 Crore shares outstanding.

Investment Rationale
The company’s non-gold businesses are headed by its home-grown leadership team with excellent stability. MGFL trades at 0.9x FY24E P/BV and the brokerage believes that there is still scope for a re-rating in valuation multiples for a franchise that can deliver RoE of 17%-18%.

While Motilal Oswal expects MGFL to deliver gold loan growth of~7%/8% in FY24/FY25, it estimates consolidated AUM growth of ~19% and consolidated RoA/RoE of ~4.0%/18% in FY24.

Promoter/FII Holdings
Promoters held 35.2 per cent stake in the company as of 31-Dec-2022, while FIIs owned 30.07 per cent, DIIs 11.57 per cent.