Jefferies has maintained its ‘Hold’ rating on Manappuram Finance, raising its target price to ₹205 from previous estimates. The current market price stands at ₹194.00.
The company reported a 52% YoY decline in Q3 profit at ₹2.8 billion, falling below estimates due to softer net interest income (NII) and higher provisions. AUM growth missed expectations, while net interest margins (NIM) also declined sequentially.
Credit costs saw a sharp rise QoQ, primarily due to stress in the microfinance (MFI) loan book. Jefferies notes that while Manappuram Finance could benefit from rising gold prices, its growth has lagged behind its peers in the gold loan segment.
The brokerage expects elevated stress in MFI loans to weigh on earnings in the near term. At 1x FY26 estimated book value, valuations appear reasonable, but any potential re-rating will depend on easing stress in the MFI portfolio.
Disclaimer: The above stock update is based on brokerage reports and company announcements. Investors are advised to conduct their own research and consult with a financial advisor before making any investment decisions.
