Shares of Manappuram Finance tumbled 7 per cent in early trade on Friday following weak Q3 results .Its consolidated net profit declined to ₹278.46 crore for December 2024 as against ₹575.31 crore in the corresponding quarter previous year.
The company’s Q3 performance, hurt by the microfinance business, has missed analysts’ estimates. Asset quality deteriorated across all segments.
However, its standalone net profit after tax rose over 5 per cent to ₹453.39 crore for the quarter under review from ₹428.62 crore in the corresponding quarter previous year, and the net interest income grew 13 per cent y-o-y to ₹1,160 crore.
The board has declared an interim dividend of ₹1 per share and fixed the record date as February 21. 2025. The said dividend shall be paid on or before March 14, 2025, according to the stock exchange filing.
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In addition, the board has approved establishment/ update of or conversion into a global medium term note programme (GMTN) to raise an aggregate amount of up to $2 billion, by issue of foreign currency denominated bonds by way of external commercial borrowings, in one or more tranches.
Manappuram Finance recorded a sequential flat gold loan growth. Domestic brokerage Motilal Oswal has reiterated neutral call on the stock at a target price of ₹215, emphasising that there could be a near-term impact on profitability and growth due to the stress in the microfinance institution (MFI) and overall weakness in macroeconomic activity.
The brokerage stressed that the company’s microfinance portfolio was hurt due to customer overleveraging and macroeconomic stress. It noted that Asirvad Microfinance reported a net loss for the quarter, driven by elevated credit costs, while AUM declined sequentially. In December 2024, the RBI revoked the ban on operations of Asirvad MFI. “Resumption of MFI operations will support better collections,” Motilal report read.
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Global brokerage Jefferies maintained its hold call at a target price of ₹205, while CLSA has retained an accumulate rating at ₹225.
The stock plummeted 6.97 per cent on the NSE to trade at ₹180.53 as at 10.42 am, after hitting a low of ₹180.50.