MANAPPURAM - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.6

• 📈 Revenue Growth: Quarterly PAT declined from ₹392 Cr to ₹376 Cr (-20.9%)
• 💰 Profit Margins: Moderate, ROE at 16.0% and ROCE at 13.1%
• ⚖️ Debt Ratio: Debt-to-equity at 2.51, high leverage typical of NBFCs
• 💵 Cash Flows: EPS of ₹19.3, supported by lending operations
• 📊 ROE/ROCE: Reasonable efficiency, but below top-tier benchmarks
• 📉 Valuation: P/E 15.1 vs Industry PE 21.2, undervalued
• 📚 Book Value: ₹147, P/B ~1.99
• 📈 PEG Ratio: 1.42, suggests valuation slightly stretched relative to growth
• 🏢 Business Model: NBFC specializing in gold loans, microfinance, and diversified lending
• 🛡️ Competitive Advantage: Strong presence in rural and semi-urban markets, brand recognition in gold loan segment

Positive

• ✅ Undervalued compared to industry PE
• ✅ Strong ROE (16%) relative to peers
• ✅ Dividend yield of 1.21% provides shareholder returns
• ✅ FII and DII holdings increased

Limitation

• ⚠️ High debt-to-equity ratio (2.51)
• ⚠️ Quarterly PAT declined (-20.9%)
• ⚠️ PEG ratio at 1.42 indicates limited growth relative to valuation
• ⚠️ ROCE at 13.1% shows modest efficiency

Company Negative News

• 📉 Profit decline in latest quarter
• 📉 Rising leverage levels raise asset quality concerns

Company Positive News

• 🌍 Expansion in microfinance and housing finance segments
• 💡 Strong brand presence in gold loan market
• 📈 Institutional investor confidence with increased FII/DII holdings

Industry

• 💹 Industry PE at 21.2, Manappuram trades at a discount
• 📈 NBFC sector benefits from rural credit demand and financial inclusion initiatives

Conclusion

Manappuram shows moderate fundamentals with undervaluation relative to peers, strong ROE, and growing institutional interest. However, high leverage and recent profit decline are key risks. Entry zone is attractive around ₹270–285 (near DMA 50 support). Long-term holding is favorable if asset quality remains stable and growth in diversified lending segments continues.

Would you like me to extend this into a peer benchmarking overlay comparing Manappuram with Muthoot Finance and Shriram Finance, or should we run a sector rotation scan to identify stronger compounding opportunities across NBFCs and financial services?