In my understanding of tracking the sector for few years now, the recent price appreciation in Manappuram could be due to two facts: MFI cyclic uptrend (clearly visible across companies and even in Asirvad numbers) + Gold prices appreciation.
I doubt there is any trend of bank backing off. Even if it is there, nothing substantial to bring the older growth rates.
Technically chart looks interesting as the chart has made few attempts of breaking out + good base formation but still lot of overhead supply.
Fundamentally I believe their gold loan business lacks structural strength, where NBFCs like IIFL (maybe even Rupeek?) were able to gain market share. Further, regulation barrier for opening more branches acts as another hurdle for bringing back the growth.
disclosure: Invested.
| Subscribe To Our Free Newsletter |
