Prabhudas Lilladher maintains accumulate on Manappuram Finance, target price Rs 195

Prabhudas Lilladher has maintained accumulate rating on Manappuram Finance in the long term with a target price of Rs 195. Shares of Manappuram Finance ended up 1.4% at Rs 178.65 on Monday while BSE sensex closed 17.14 points down at 41,558.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 1286.79 crore, up 9.59% from last quarter sales of Rs 1174.19 crore and up 26.85% from last year same quarter sales of Rs 1014.44 crore. The company has reported net profit after tax of Rs 407.65 crore in latest quarter.


The company’s top management includes Dr.Amla Samanta, Mr.V R Rajiven, Mr.V P Nandakumar, Mr.P Manomohanan, Mr.Jagdish Capoor, Mr.Gautam Narayan, Mr.E A Kshirsagar, Mr.B N Raveendra Babu, Dr.Shailesh J Mehta, Mr.V R Ramachandran. Company has Deloitte Haskins & Sells LLP as its auditors. As on 30-09-2019, the company has a total of 843,261,964 shares outstanding.

Investment Rationale

The brokerage has initiated coverage on the stock given its strong moat in the gold loan business and rising scalability of non-gold business. Manappuram stands in a sweet spot underpinned by low leverage and effective asset liability management. The brokerage estimates 20% AUM CAGR, operating leverage and prudent asset quality over FY20-22.