Manappuram Q4 Concall highlights
Gold Loan
1.Product tenor has changed to 6 month now completely.
2.Expecting 10% increase in AUM.
3.Yield will be around 22.5% … Current yield is 21%… will increase slowly and till Q3 they will reach here.
4.Banks are not that aggressive now as they are getting less liability growth and asset growth is high.
MFI
1.They
1.Next year expected AUM growth of 35-40%.
2.They will infuse 500Cr equity and also Tier 2 capital.
3.They are also in talk with bankers about how to raise funds.
4.Do not want to expand branches.
In other business they expect growth north of 50%.
ED Case
They got a stay order from Kerala highcourt on Friday … Expecting further favourable outcome in coming days on defreezing assets.
My interpretation
As business was expected to show good performance,this ED issue came out of nowhere. I think risk here is on funding side. How lenders react after ED issue?(though management says they were aware of same since long).
Otherwise they are on a path to 20% ROE by end of this year.
Valuation
1.If we look at gold lender Muthoot is valued at 2 times book.
2.All pure MFI(Credit acces,Arman,Fusion) are valued at 2-4times book.
Manappuram current book Value is 114.
FY 24 will be near 135.
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