Manappuram Finance Stock Surges Nearly 10% on Strong Q2FY24 Performance

In Wednesday’s intra-day trade, shares of Manappuram Finance witnessed an impressive surge of 10%, reaching Rs 154.65 on the BSE amidst robust trading volumes. The gold financier’s stock had previously hit a 52-week high of Rs 156.55 on September 4, 2023.

As of 10:30 AM, it was trading at Rs 153, reflecting a notable 9% increase compared to the S&P BSE Sensex’s 0.9% rise.

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The trading scenario observed a significant uptick, with average trading volumes on the counter escalating over seven-fold on the current day. The cumulative equity shares traded on the NSE and BSE amounted to 27.08 million by 10:25 AM.

Manappuram Finance reported a robust performance in the September quarter (Q2FY24), with a better-than-expected 37% year-on-year rise in profit, totaling Rs 560.7 crore. This commendable growth was attributed to the substantial demand for loans. The consolidated assets under management (AUM) experienced a notable 27% surge, reaching Rs 39,000 crore.

The financial metrics of the company underscored its strong position in the market, with net interest income witnessing a 25% YoY growth, reaching Rs 1,350 crore. Additionally, the pre-provision operating profit (PPOP) demonstrated a remarkable 37% YoY increase, totaling Rs 870 crore.

The consolidated net interest margin (NIM) expanded by 15 basis points quarter-on-quarter, standing at 15%, driven by improved yields and a stabilizing trend in borrowing costs. Analysts foresee a stabilization in gold loan yields going forward.

In a strategic move to mitigate cyclicality in the gold loan segment, Manappuram Finance has actively diversified into non-gold segments. The share of non-gold products in the company’s AUM mix has reached 47%, a significant rise from 37% in 2QFY23. This diversification strategy aims to enhance the company’s resilience in the face of market dynamics.