Manappuram Finance Research Report By Axis Securities

MGFL believes that the de-monetization scheme will lead Unorganized gold loans to shift towards the organized segment. Also, 2/3rd of customers have already moved to online gold product facility making the demonetization impact negligible. The impact of demonetization is expected to be visible in Q3 FY17 for at least for 10-12 days which should impact both disbursals (although 50% are disbursed through NEFT/online) as well as collections. We thus expect 3Q to be a soft quarter, however long term prospects remains intact. We value MGFL at FY18E P/BV multiple of 2.5x to arrive at target price of Rs.102 and continue to have BUY rating.