Manappuram Finance Q1 Review - Valuations Price In Any Positives Ahead: Prabhudas Lilladher
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Prabhudas Lilladher Report
Manappuram Finance Ltd.’s vulnerability to competition (organised/non-organised) and Covid-19 continues to reflect in sluggishness in gold loan (weak trends since Q3 FY21 with sharpest decline of 13% QoQ in Q1 FY22) and gold tonnage (shrinkage since Q4 FY20; 4% QoQ decline: Q1 FY22) since past a year.
While Manappuram Finance attributes this fall and asset quality volatility (elevated auctions: Rs 15 billion) to product structure (three-month tenure) and expects faster recovery ahead, challenges stand acute on non-gold side (micro finance institution non performing asset:3.6%/ housing finance NPA:7%/ vehicle finance gross non performing asset:6%).
Q1 FY22 earnings stood broadly in-line but tepid net interest income, higher provisions restricted profit after tax (7%QoQ decline).
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