Manappuram Finance clocks a 52-week high on changes in management, strong Q2 nos

Shares of Manappuram Finance, a Kerala-based non-banking financial corporation, jumped in the morning deals on November 16, extending their rally for the fourth straight session. The stock rose as much as 8 per cent and clocked a 52-week high of Rs 162.3 apiece.

At around 11:33 a.m., shares of Manappuram Finance traded 5.82 per cent or Rs 8.75, higher on the BSE at Rs 159.2 apiece. The market capitalisation of the company stood at Rs 13,475.24 crore. The stock ended 7.01 per cent or Rs 10.55 higher at Rs 161 apiece. 

Reasons for the rally in Manappuram Finance's stock

Changes in senior management 

The company announced certain changes in senior management through its regulatory filing. They are as below:

-Digbijay Bandyopadhyay was appointed as the Vice President of the Commercial Vehicle Finance Department.

-Hemant Patil as the Sr. Deputy General Manager of the Car Loan Department; Ajay Bhalchandra Shelke as the General Manager of the Two-Wheeler Finance Department

-Satyanarayan K. Rao as the Vice President of the Farm Equipment Department

-Vijayakumar KB as the Senior General Manager of the MSME Department.

-Ratheesh P.M. as the General Manager of the Micro Home Finance Department

-Vipin T S as the Deputy General Manager of the Security Personal Loan Department 

-Satheesh Kumar M as the Senior General Manager of the Digital Personal Loan Department 

-Kamal Parmar as the Senior Vice President of the Commercial Vehicle Finance Department

On the other hand, the company removed Sreejesh, Head of Operation Department (gold loan), from the list of senior management personnel.

Healthy Q2 performance 

The company for the September quarter of the current fiscal posted a profit of Rs 420 crore as against Rs 349 crore logged in the same quarter last year. Zee Business Research had estimated a profit of Rs 400 crore.

The NBFC's net interest income (NII) has increased to Rs 962 crore from Rs 872 crore in the same quarter of the previous fiscal. NII was estimated at Rs 975 crore.

The company’s gold loan book has also climbed 8 per cent YoY. Also, the contribution of gold AUM to the overall asset base has increased to 47 per cent. Furthermore, the NIM, or net interest margin, is also retained at 12.6 per cent.

Strong management commentary 

The management expects 8 to 10 per cent growth in gold loans in FY24 and will maintain the margin in gold loans despite increasing competition. The company sees growth in the microfinance segment.

Positive brokerages' view

CLSA maintained a 'buy' rating on the stock and raised the target to Rs 185 apiece from Rs 174.

Morgan Stanley also continued with an 'overweight' rating and raised the target to Rs 200 apiece from Rs 183.

Manappuram Finance share price: Past performance

In 2023 so far, shares of Manappuram Finance have gained over 33 per cent as against the Nifty50's rise of over 8 per cent.

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