Monday, July 11, 2016

Manappuram Takes Cue From Credit Rating, Eyes Q1 Results

After a strong rally in recent days on a CRISIL re-rating, Manappuram Finance's stock is pausing to take further cues from its performance in Q1, with results set to be announced on August 9th. The mood is bullish in Manappuram stock, with it edging up slightly in today's trade, and closing barely 4.3% away from its 52-Week High.

Rating agency CRISIL upgraded its rating on the long-term bank facility and non-convertible debentures of Manappuram Finance, while reaffirming the rating on short-term debt of the company.

Only when strategy meets good fortune, Manappuram type turnarounds happen.

The result is also for its public investors to enjoy, as the stock has multiplied by over 4 times within the last 10 months and over 8 times within the last 3 years.

Starting in FY’12, it was challenge after challenge for gold loan players like Manappuram, when new regulatory hurdles as well as falling gold prices hit them hard.

But Manappuram kept its faith and laid the foundation for a diversified asset model by starting operations in housing finance, microfinance, commercial vehicle finance, SME finance etc.

But just when the new strategy of asset diversification was getting into momentum with around 10% of the consolidated loan book getting to be non-gold, fortune has showered on Manappuram in the form of surging gold prices.

FY’16 profit was up by 30%, and better growth is visible on the horizon due to improving gold prices post-Brexit vote, and all its newer lending businesses growing admirably with the added advantage of lower bases.

Manappuram also fares well in core metrics like Dividend Yield, FII & DII Holding, & Return on Equity.

Its market cap had recently breached the $1 billion mark.

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