MANAPPURAM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | MANAPPURAM | Market Cap | 22,863 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 | 284 ₹ | DMA 200 | 274 ₹ |
| Chg in FII Hold | -1.38 % | Chg in DII Hold | 1.98 % | PAT Qtr | 381 Cr. | PAT Prev Qtr | 376 Cr. |
| RSI | 44.9 | MACD | -10.7 | Volume | 87,42,027 | Avg Vol 1Wk | 68,09,579 |
| Low price | 211 ₹ | High price | 322 ₹ | PEG Ratio | 1.37 | Debt to equity | 2.51 |
| 52w Index | 53.6 % | Qtr Profit Var | -15.9 % | EPS | 18.5 ₹ | Industry PE | 17.2 |
📊 Financial Overview
- Revenue & Profitability: PAT rose slightly from 376 Cr. to 381 Cr. QoQ, showing stability but limited growth. EPS at 18.5 ₹ is modest relative to valuation.
- Margins & Returns: ROE at 16.0% and ROCE at 13.1% are moderate, reflecting average capital efficiency.
- Debt & Liquidity: Debt-to-equity ratio of 2.51 indicates high leverage, which increases financial risk.
- Cash Flow: Stable profitability supports dividend payouts, but high debt levels constrain flexibility.
💹 Valuation Metrics
- P/E Ratio: 14.6 vs Industry PE of 17.2 → Slightly undervalued.
- P/B Ratio: ~1.84 (Price 270 ₹ / Book Value 147 ₹) → Reasonable relative to assets.
- PEG Ratio: 1.37 → Indicates growth is priced fairly but not cheap.
- Intrinsic Value: Current price is close to fair value, supported by earnings stability.
🏢 Business Model & Competitive Advantage
Manappuram Finance operates in NBFC space, focusing on gold loans, microfinance, and diversified lending. Its strong presence in rural and semi-urban markets provides a competitive edge. However, high leverage and dependence on gold loan cycles pose risks.
📈 Entry Zone & Long-Term Guidance
Technically, RSI at 44.9 and negative MACD suggest mild weakness. A good entry zone would be 255–265 ₹ (near support levels). Long-term holding is advisable only if debt levels are managed effectively and profitability sustains.
✅ Positive
- Stable PAT performance (381 Cr. vs 376 Cr.).
- Fair valuation compared to industry averages.
- Dividend yield of 1.30% provides income support.
- DII holdings increased (+1.98%), showing strong domestic confidence.
⚠️ Limitation
- High debt-to-equity ratio (2.51) increases financial risk.
- Quarterly profit variation (-15.9%) shows inconsistency.
- ROE and ROCE are moderate compared to top peers.
📉 Company Negative News
- FII holdings decreased (-1.38%), showing reduced foreign confidence.
- High leverage raises concerns about financial stability.
📈 Company Positive News
- EPS at 18.5 ₹ reflects steady profitability.
- DII accumulation (+1.98%) signals strong domestic support.
🏭 Industry
The NBFC sector benefits from rural credit demand, gold loan cycles, and SME growth. However, it remains sensitive to interest rates, liquidity, and regulatory changes. Industry PE at 17.2 highlights Manappuram’s slight undervaluation relative to peers.
🔎 Conclusion
Manappuram Finance shows stable profitability and fair valuation but faces challenges due to high leverage and moderate return ratios. While dividend yield and domestic investor confidence are positives, investors should be cautious. Accumulation near 255–265 ₹ is recommended for long-term holding, contingent on debt management and sustained profitability.