Manappuram Finance - Q4 FY21 Result Update - YES Securities

(Rating: BUY, TP: Rs 230, Upside: 44.0%)

Fortified by gold loans; asset quality risks in other segments largely priced

- We believe that asset quality risks in non-gold lending segments are largely priced in the current valuation of 1.3x FY23 P/ABV (stock has given a negative return over past 10 months).

- Valuation is rather appealing when looked in the context of 1) sustained high RoA/RoE delivery, 2) BV compounding of 22-23% over FY21-24, and 3) robust capital position with Tier-1 capital of 29%.

- Reiterate BUY and retain 12m PT of Rs230. Recent recovery in gold prices could act as a catalyst for near-term stock outperformance.

- Equity raising by MFI subsidiary will also be a positive event.

Shares of MANAPPURAM FINANCE LTD. was last trading in BSE at Rs.154.15 as compared to the previous close of Rs. 160.3. The total number of shares traded during the day was 505522 in over 5272 trades.

The stock hit an intraday high of Rs. 157.6 and intraday low of 153.55. The net turnover during the day was Rs. 78134549.

Source : Equity Bulls

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