Arman Financial Services Ltd

@sammy11 – I have entered the stock probably at the wrong timing. 20% loss right now. However, I invested in this stock given its past resilience and being the fastest growing MFI. However, I see the following challenges –

1. The GNPA number is increasing from last 3 quarters → 2.5% (Q2), 2.8% (Q3), 2.9% (Q4). This is a bit concerning.

2. Management has said that the honeymoon period for MFIs has been over. So, the 40% AUM growth is at risk also.

3. The other MFIs are performing extremely poorly on valuations, with exception of Credit Access Gramin.
   Fusion – 1.55 P/B (RoE – 17.9%)
   Muthoot Microfin – 1.47 P/B (RoE – 20.4%)
   Satin Creditcare – 1 P/B (RoE – 21%)
   Credit Access Gramin – 3.21 P/B (RoE – 24.8%)

All these factors give lower the confidence. I am not sure when to average more. Arman is still at 2.3 P/B. Is this the bottom? Or are we looking for more correction?

I am awaiting results. Will invest post that I guess. Any counter opinions?