Please refer to important disclosures at the end of this report
1
Manappuram Finance Limited (MFL) is a non-banking financial compan
y
(NBFC). The Company is engaged in offering gold loans, microfinance, housing
loans and commercial vehicle loans. MFL management has taken various
positive steps to improve business mix and structure (AUM). Considering stead
y
loan book growth, improving return ratio, high dividend yield and stable
regulatory environment will be positive for the company. AUM grew strongly b
y
38% YoY (0.5% QoQ) to `146bn led by 16% share of new business o
f
consolidated AUM. Gold Loan AUM of Rs 123bn were as Gold holdings at 65.1
tonnes an increase of 11.4% YoY indicating that growth is driven by volume
increase. Cost of funds declined further 24 bps q-q to 9.9% due to rising of lowe
r
cost funds from banks and mutual funds. The company has witnessed a decline
in OPEX to AUM (%) from 8.4% in Q3FY16 to 6.4% in Q3FY17 which is positive
sign for the company. Capital Adequacy is healthy at 22.8% (Tier 1 - 22.4%)
compared to the minimum 15.0% stipulated by RBI for gold loan companies.
About 98% and 92% of installment due in November and December 2016
respectively have been collected and the management expects collection rate to
fully normalize in the next few months. The demonetization will lead to
unorganized gold loan to shift towards the organized segment. The impact o
f
demonetization is expected to be visible in FY17 which should impact both
disbursals (although 50% are disbursed through NEFT/online) as well as
collections. The company has reported healthy RoE of 21% (Q3FY17) and has
shown profit growth of 17% for the last 3 years. Hence Buy.
BUY
CMP `93
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 34.5
MF / Banks / Indian Fls 8.7
FII / NRIs / OCBs 36.7
Indian Public / Others 20.2
Abs. (%) 3m 1yr 3yr
Sensex 2.5 16.5 39.1
MFL (9.6) 220.5 337.4
.
1.4
Reuters Code MNFL.BO
2
BSE Sensex 28,290
Nifty 8,769
Face Value (
`
)
Finance (incl. NBFC)
Market Cap (
`
cr) 8,408
52 Week High / Low 107/26
Avg. Daily Volume 7,59,305
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Manappuram Finance
Others | Finance (incl. NBFC)
February 9, 2017
Manappuram Finance | Finance (incl. NBFC)
February 9, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Manappuram Finance
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
-5% to -15%
)
Sell
(
< -15
)