Shares of Manappuram Finance, a non-banking financial company (NBFC), experienced a significant rally in Wednesday’s trading session following the positive reception of the company’s Q2FY24 performance. The firm reported a robust 37% year-on-year increase in its consolidated net profit, reaching ₹560.65 crore. In the corresponding quarter last year, the net profit stood at ₹409.5 crore.
On a sequential basis, the net profit showed a growth of 12.6%, compared to ₹498.02 crore reported in the quarter ending June 2023. The company also reported a 25% improvement in net interest income, amounting to ₹1,468 crore compared to ₹1,168 crore in Q2 FY23.
Total revenue for the quarter came in at ₹2,174 crore, marking a 27% increase from ₹1,714 crore in the same period last year. The ‘gold, loan, and other’ segment contributed ₹1,537.22 crore to the total revenue, while the ‘microfinance’ segment added ₹636.80 crore.
In terms of asset quality, the gross non-performing assets (GNPA) improved to 1.6% from 2% in Q2FY23, and the net non-performing assets (NPA) dropped to 1.4% in Q2FY24 from 1.8% in the year-ago period.
Assets Under Management (AUM) in the gold segment witnessed a quarter-on-quarter increase of approximately 1% and a year-on-year increase of 8%, reaching around ₹20,800 crore. The quantity of gold, measured in tonnage, remained relatively stable at 59.4 tonnes compared to the previous quarter.
Following the release of Q2FY24 numbers, Manappuram Finance’s shares opened strong in the trading session at ₹153.50 apiece, compared to the previous closing price of ₹140.35 apiece. The stock further strengthened to ₹154.35 apiece, marking an impressive gain of 10%.
Motilal Oswal, a domestic brokerage firm, revised its FY24E/FY25E EPS upward by 5%/6% in light of robust growth expectations in non-gold segments and an increase in other income. The brokerage projects a 10%/20% compound annual growth rate (CAGR) in AUM for gold/consolidated book over FY23 and FY26.
Motilal Oswal continued with its ‘buy’ rating on Manappuram Finance, citing a favorable risk-reward and a target price of ₹180 apiece.
On the other hand, Dolat Capital maintained its ‘Reduce’ call on the stock with a target price of ₹155 apiece, expressing concerns about weakness in the core business of gold and average non-gold franchises.
As of 10:15 AM, the stock was trading with a gain of 8.87% at ₹152.75 apiece.
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