Manappuram Finance approaches 52-week high after Morgan Stanley maintains 'overweight' call

Shares of Manappuram Finance in Wednesday’s session (December 20) gained up to 2 per cent to Rs 176.35, nearing its 52-week high price of Rs 177.45. The NBFC company hit its 52-week high price on December 18.

Global brokerage Morgan Stanley (MS) has iterated its ‘overweight’ rating on the stock with a target price of Rs 210. This is a nearly 22 per cent potential upside from the last close.

The brokerage liked Manappuram’s intent put forth on the analyst day to protect 20% return on equity (ROE) with 20% loan growth sustainably. For gold loans, the NBFC has guided for 8 per cent growth with 21-22 per cent yield. Detailed discussion of non-gold business should help improve investor confidence, stated the brokerage.

As of the quarter ending September, 27 per cent stake in the company is held by FII, with BOFA Europe and BNP Paribas holding over 2 per cent stake each. 

On a year-to-date (YTD) basis, the stock has gained over 50 per cent, while its 1-year gain is to the tune of 49.87 per cent.

Manappuram Finance Limited is a smallcap company with a m-cap of Rs 14,622 crore. The Company is engaged in offering gold loans, microfinance, housing loans and commercial vehicle loans.