MANAPPURAM - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 2.9

Here’s a detailed analysis of Manappuram Finance based on its financial and strategic indicators

📊 Core Financials

Profitability

ROE (10%) and ROCE (11%) are modest — indicates average efficiency in generating returns.

EPS of ₹14.4 is low for a financial services firm with this market cap.

Profit Volatility

A swing from ₹278 Cr. profit to a loss of ₹191 Cr. (Profit Variation: -134%) is a serious red flag and points to sharp deterioration in asset quality, provisioning, or operating margins.

Leverage

Debt-to-equity of 2.90 — quite high. While typical in NBFCs, it increases fragility during stressed financial cycles.

📈 Valuation Metrics

Metric Value Insight

P/E 18.2 Lower than industry average of 25.2 — slightly undervalued

P/B Ratio ~1.76 Fairly priced — no major premium or discount

PEG Ratio -5.64 Negative PEG suggests declining earnings and unreliable growth

Dividend Yield 1.37% Reasonable passive income for long-term holders

🧠 Business Model & Edge

Primarily focused on gold loans and other retail lending.

Has strong rural presence and brand recall, but faces risks in credit quality and regulatory scrutiny.

High dependence on short-term borrowing and customer retention in competitive segments.

📉 Technical Overview

RSI: 40.3 — leaning toward oversold zone; potential for short-term bounce.

MACD: 0.38 — mildly positive but lacks conviction in trend.

Trading around DMA 50 and above DMA 200 — consolidation range, not showing strong momentum.

🛒 Entry Zone & Long-Term View

Entry Range: ₹245–₹255 — near 200-DMA and recent support levels. A break below ₹240 could signal weakness.

Long-Term Outlook: Cautious. While valuation is modest and the company has a footprint in gold loans, the sharp quarterly loss and negative PEG ratio demand close monitoring. Suitable only for investors who can stomach short-term volatility and have conviction in NBFC turnaround potential.

Want to explore how it stacks up against Muthoot Finance or dig into its asset quality trends from past years? Let’s keep the analysis rolling.

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