Analysts at Morgan Stanley have also given the stock an overweight call with a target price of Rs 200.
In Q2FY24, Manappuram Finance reported a 36 percent year-on-year growth in net profit to Rs 560.65 crore from Rs 409.49 crore in the previous fiscal.
Shares of Manappuram Finance gained nearly 6 percent during early trades on November 29 as Indian gold prices reach an all time high. At 10:16 am, the stock was trading at Rs 160.40
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Gold prices surged to a record high, surpassing Rs 62,800 per 10 grams at the opening on November 29, providing a significant boost to the shares of the gold finance company Manappuram Finance.
Morgan Stanley analysts have expressed a positive outlook on the stock, assigning it an overweight rating and setting a target price of Rs 200. During a recent meeting with analysts, the company reportedly reaffirmed its guidance for a 20 percent loan growth and a 20 percent return on equity (ROE) in FY2024, driven by its non-gold businesses. Regarding gold loans, the company indicated an 8 percent growth in FY2024, with a specific focus on maintaining yields at 21-22 percent.
Morgan Stanley’s analysis also highlighted the management’s confidence in managing credit costs at 1-1.5 percent for non-gold non-microfinance institution (MFI) businesses, emphasizing a strong underwriting quality in this segment.