Manappuram Finance shares erase gains despite Q1 profit rise

Manappuram Finance shares briefly gained before falling back, despite a significant increase in first-quarter profit. The stock opened 2.7 percent higher at ₹369.95 but closed at ₹353.35. The company reported a 41 percent rise in standalone net profit to ₹552 crore, surpassing estimates. Jefferies praised the profit, which was 15 percent above expectations, attributing it to better net interest income and lower provisions.

The brokerage also forecasted 19 percent growth in consolidated assets under management in FY27, driven by healthy customer additions and branch expansions. Jefferies raised its FY27-28 earnings per share estimates by 8-13 percent and maintains a buy rating with a target price of ₹430. CLSA, on the other hand, retained a hold rating with a target price of ₹350, noting that the Q1 profit beat estimates by 3 percent due to stable net interest income and reduced operating expenses and credit costs.

The gold loan segment grew 12 percent quarter-over-quarter, while loan yields improved by 60 basis points to 17.7 percent. CLSA believes gold loan growth will be driven by tonnage rather than higher loan-to-value ratios, as gold prices have remained flat.