MANAPPURAM - Investment Analysis

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

Investment Rating: 2.9

📊 Fundamental Analysis

Manappuram Finance presents a mixed bag of value and risk. While it trades at a discount to industry peers, recent earnings volatility and moderate return ratios raise caution.

Metric Value Implication

Market Cap ₹21,940 Cr. Mid-cap NBFC; decent scale but not dominant

Stock P/E 18.2 Undervalued vs. Industry PE of 25.2 — attractive on surface

PEG Ratio -5.64 Negative due to earnings contraction — signals risk

ROE / ROCE 10.0% / 11.0% Below ideal for financials — mediocre capital efficiency

Dividend Yield 1.37% Moderate yield — not a strong income play

Debt-to-Equity 2.90 High leverage — typical for NBFCs, but adds financial risk

EPS ₹14.4 Decent earnings, but recent loss clouds reliability

Profit Growth (QoQ) -134% Sharp decline — major red flag

📉 Technical & Trend Analysis

Current Price: ₹259

DMA 50 / DMA 200: ₹260 / ₹225 — trading near short-term average, above long-term

RSI: 40.3 — approaching oversold zone

MACD: +0.38 — weak bullish signal

Volume: Below average — waning interest

⚠️ Is It a Good Long-Term Investment?

Not currently. Despite attractive valuation and institutional interest (FII/DII holding up), the negative PEG ratio, sharp profit decline, and average ROE/ROCE suggest caution. It may recover, but it’s not a strong long-term compounder at this stage.

🎯 Ideal Entry Price Zone

Buy Zone: ₹220–₹235

Near 200 DMA and historical support

Only consider entry if earnings stabilize and PEG turns positive

Watch for RSI < 35 and MACD crossover for timing

🧭 Exit Strategy / Holding Period (If Already Holding)

If you're already invested

Holding Period: Short-term (6–12 months) unless earnings rebound

Exit Strategy

Partial Exit near ₹275–₹285 if price recovers and RSI > 65

Full Exit if next quarter shows continued losses or ROE drops below 9%

Reassess quarterly based on PAT recovery and asset quality

Would you like help identifying stronger NBFC alternatives with better ROE and PEG metrics, like Cholamandalam or Muthoot Finance?

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