Manappuram Finance slips 10%, down over 30% since November 8

NEW DELHI: Shares of Manappuram Finance slumped over 10 per cent in Monday’s trade to take its slide since November 8 to over 30 per cent.

Experts said as gold loan lenders mostly deal in cash, they could be affected in the short term as two large currency denominations fall out of circulation and hit the businesses of their borrowers. The stock plummeted 10 per cent to hit a low of 68.20 on BSE.

“While some near-term growth pressure is likely, structural growth levers are in place, viz, a) stabilising gold prices; b) lower LTV/gram; and c) lower auctions. Further, product diversification and scale up of non-gold AUM will be added triggers. While monetisation impact is uncertain, MGFL still has levers to improve RoE from 13 per cent to about 22 per cent, which will help further re-rating,” said Edelweiss Securities.

The stock is trading at 2.4 times FY18E price to consolidated book value.