Morgan Stanley has maintained an Equal Weight (EW) rating on Manappuram Finance (MGFL) with a target price of ₹175, implying a potential 3% downside from the current market price of ₹180.41.
Key Takeaways:
- RBI lifted restrictions on disbursements for Asirvad MFI, MGFL’s microfinance subsidiary.
- Morgan Stanley had previously factored in 10% provisions for the MFI loan book (FY25-27) due to the embargo.
- The valuation assigned to Asirvad MFI has been removed from the sum-of-the-parts (SOTP) valuation.
- Awaiting management guidance on:
- The expected pace of disbursement recovery.
- Revised (lowered) loan pricing and underwriting norms.
- MGFL’s stock has already rallied 29% from its low on 22 October 2024, suggesting limited near-term upside.
While the lifting of the RBI restrictions is a positive development, Morgan Stanley highlights the need for clarity on Asirvad MFI’s future operations and earnings trajectory.
Disclaimer: This article is for informational purposes only. Please consult your financial advisor before making any investment decisions.
