I buy in chunks, building up positions in a period of 2-3 months. So far, liquidity hasn’t been a problem for me (also given my low capital base).
Yes levels of 850 is generally attractive, however I have been able to find other opportunities where growth is more clearly visible or I have more conviction. Thats why I haven’t bought the stock. But valuation wise, it looks reasonable at these levels.
I do track the company and really admire their execution over years.
I haven’t done anything on Manappuram over the last 6-months. Current valuations are very cheap and I don’t like selling things that are very cheap. The mistake that I made in Manappuram was of not selling last year, when it reached 2.5x P/B and I upgraded my sell price to 3x P/B as I thought growth will continue.
From near term perspective, it seems that quarterly profit run rate of 260-280 cr. should improve given improvement in MFI performance. If I assume a 280-300 cr. quarterly run rate and a 10x exit multiple, exit price should come around 130-140 (assuming business never really improves). Lets see if business ever revives. I am okay holding it for now as the management has turned around the ship multiple times in the past, from crises which were far severe than the current one. Right now, the only problem is in growth due to higher competitive intensity which at some point should normalize. But to add more, I need some visibility on business improvement or more attractive prices (Manappuram reached 0.4x P/B in 2013 downcycle).
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