Manappuram Finance Ltd - Investment idea by IIFL

Manappuram Finance’s (MFL) business growth has been reviving since the start of FY15. The supporting factors being stable gold prices and branch activation efforts implemented by the company. The quarterly disbursements are on the uptrend and stood at a multi-quarter high of ~`. 6000cr in Q3 FY15. The stock of gold holdings has increased from 45.5 tons to 50 tons during 9m FY15. Consequently, AUM has grown year-to-date by 8% to `. 8,824cr. MFL has a large underutilized network of ~3,300 branches which had handled AUM of `. 10000cr+ during mid- FY13. Asset growth recovery in the longer term would also be driven by introduction of new products such as microfinance, affordable housing and vehicle finance. This would also lend the much needed diversification to the business model.

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