Shares of Manappuram Finance Ltd fell over 5% on Wednesday after the company reported a weaker-than-expected Q3FY25 performance due to stress in its microfinance business. The stock was trading at ₹184.30, down 5.03%, following its quarterly results.
For Q3FY25, net profit rose 5.8% YoY to ₹453 crore from ₹428 crore in the same period last year. The net interest income (NII) grew 13% YoY to ₹1,160 crore, indicating strong lending activity.
However, provisions surged 176% YoY to ₹773 crore, compared to ₹280 crore in Q3FY24, and were up 45.3% sequentially from ₹531 crore in Q2FY25. This rise in provisions impacted investor sentiment.
On the asset quality front, gross non-performing assets (GNPA) rose to 2.5% from 2.4% in the previous quarter, while net NPA increased to 2.3% from 2.1% in Q2FY25.
Brokerage views:
- Jefferies retained a ‘hold’ rating on the stock, raising the target to ₹205 from ₹190.
- CLSA maintained an ‘accumulate’ rating with a target of ₹225, highlighting a robust gold loan business.
The stock decline reflects investor concerns over rising provisions and asset quality deterioration despite healthy revenue growth.
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