Manappuram Finance saw its shares fall by 7% in early trading on Friday, following disappointing results for the third quarter of fiscal year 2024. The company reported a sharp decline in its consolidated net profit, which dropped to ₹278.46 crore for the quarter ending December 2024, down from ₹575.31 crore during the same period last year. This decline was attributed to a challenging performance in the microfinance sector and overall weakening asset quality across all business segments.
Despite the overall slump, Manappuram Finance’s standalone net profit showed a slight increase of 5%, rising to ₹453.39 crore from ₹428.62 crore in the previous year’s quarter. Additionally, the company’s net interest income grew by 13% year-over-year, reaching ₹1,160 crore.
In response to the results, the board declared an interim dividend of ₹1 per share, with the record date set for February 21, 2025. The dividend is expected to be paid on or before March 14, 2025.
In other developments, the board also approved the establishment or conversion of a global medium-term note (GMTN) program, aiming to raise up to $2 billion through the issuance of foreign currency-denominated bonds via external commercial borrowings in multiple tranches.
Manappuram Finance’s gold loan portfolio showed flat sequential growth, and its microfinance segment continued to face challenges. Brokerage firm Motilal Oswal maintained a neutral stance on the stock, with a target price of ₹215, citing potential near-term impacts on profitability and growth, particularly due to the stress in the microfinance sector and broader macroeconomic weakness.
Motilal Oswal’s report highlighted that the company’s microfinance operations were impacted by overleveraging among customers and macroeconomic pressures. Notably, Asirvad Microfinance, part of the Manappuram Group, reported a net loss for the quarter, with an increase in credit costs and a decline in assets under management. The Reserve Bank of India recently lifted the ban on Asirvad’s operations, which could help improve collection efficiency in the future.
Other analysts also expressed caution on the stock. Global brokerage Jefferies maintained a “hold” rating with a target price of ₹205, while CLSA retained its “accumulate” rating, setting a target price of ₹225.
As of 10:42 AM, Manappuram Finance’s stock had fallen 6.97% on the National Stock Exchange, trading at ₹180.53, after reaching an intraday low of ₹180.50.
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