MANAPPURAM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | MANAPPURAM | Market Cap | 22,833 Cr. | Current Price | 270 ₹ | High / Low | 322 ₹ |
| Stock P/E | 14.6 | Book Value | 147 ₹ | Dividend Yield | 1.30 % | ROCE | 13.1 % |
| ROE | 16.0 % | Face Value | 2.00 ₹ | DMA 50 | 294 ₹ | DMA 200 | 270 ₹ |
| Chg in FII Hold | -1.38 % | Chg in DII Hold | 1.98 % | PAT Qtr | 381 Cr. | PAT Prev Qtr | 376 Cr. |
| RSI | 33.9 | MACD | -3.28 | Volume | 69,04,627 | Avg Vol 1Wk | 75,64,758 |
| Low price | 169 ₹ | High price | 322 ₹ | PEG Ratio | 1.37 | Debt to equity | 2.51 |
| 52w Index | 66.2 % | Qtr Profit Var | -15.9 % | EPS | 18.5 ₹ | Industry PE | 18.9 |
📊 Financials: Manappuram Finance has a market cap of 22,833 Cr. with quarterly PAT at 381 Cr., slightly higher than 376 Cr. in the previous quarter, though profit variation is negative (-15.9%). ROE at 16.0% and ROCE at 13.1% reflect moderate efficiency. Debt-to-equity ratio of 2.51 indicates high leverage, typical for NBFCs but adds risk. EPS stands at 18.5 ₹, supported by stable earnings. Cash flows remain cyclical, tied to lending and repayment cycles in gold loans and other financial services.
💹 Valuation: Current P/E of 14.6 is below the industry average of 18.9, suggesting undervaluation. P/B ratio is ~1.84 (270 ₹ / 147 ₹), which is reasonable. PEG ratio of 1.37 indicates growth is priced fairly. Intrinsic value appears close to current levels, making the stock moderately attractive for accumulation.
🏦 Business Model & Competitive Advantage: Manappuram Finance operates as a non-banking financial company (NBFC), focusing on gold loans, microfinance, and vehicle financing. Its competitive advantage lies in strong rural presence, brand recognition, and expertise in gold-backed lending. However, profitability is sensitive to credit cycles, interest rates, and regulatory changes.
📈 Entry Zone: With RSI at 33.9 (near oversold) and DMA 200 support around 270 ₹, accumulation around 250–270 ₹ is favorable. Current price at 270 ₹ offers a reasonable entry for long-term investors.
🕰️ Long-Term Holding Guidance: Manappuram Finance is fundamentally stable with growth potential in gold loans and rural financing. Long-term holding is recommended, but investors should monitor leverage levels and asset quality risks closely.
Positive
- Strong ROE (16.0%) and moderate ROCE (13.1%).
- EPS of 18.5 ₹ supported by stable earnings.
- P/E (14.6) below industry average (18.9), indicating undervaluation.
- DII holdings increased by 1.98%, showing domestic investor confidence.
Limitation
- High debt-to-equity ratio (2.51) adds financial risk.
- Quarterly profit variation negative (-15.9%).
- FII holdings decreased by 1.38%, showing reduced foreign confidence.
- Stock trading below DMA 50, indicating weak momentum.
Company Negative News
- Decline in quarterly profit variation despite stable PAT.
- Reduced foreign institutional investor confidence.
Company Positive News
- Stable PAT performance (381 Cr. vs 376 Cr.).
- Strong domestic institutional investor support.
Industry
- NBFC sector benefits from rural credit demand and gold loan growth.
- Industry P/E at 18.9 highlights Manappuram’s undervaluation.
Conclusion
⚖️ Manappuram Finance is a fundamentally stable NBFC with strong presence in gold loans and rural financing. Entry around 250–270 ₹ is favorable, and long-term holding is recommended, though investors should remain cautious of high leverage and asset quality risks.