IMHO, the only number that we need to track here is Ashirwad’s NPA and profitability. If Ashirwad reports even a minor profit this quarter, then this company is headed to 160 for sure. It’s just matter of a couple of more weeks. The numbers should be out by November first week. Rest of the business segments are chugging along fine. The management commentary needs to be tracked carefully regarding growth in Q3 and Q4. It’s just the MFI business, which is acting as a cap on valuations. However, it can be an easy doubler from here in the next 6 months, if growth picks up for Ashirwadh…whichever metric you use, P/B, P/E , Mcap/ AUM…it’s ridiculously cheap. Will be interesting to see how long the market keeps ignoring this gem in the NBFI space. Perhaps the only mispriced bet left right now in the NBFI space, considering the quality of asset book they are building by focussed geographic and product diversification. I am sure the franchise will be valued at somewhere around RS.25000 crores, sometime in 2018. Since this sector has been on an absolute tear last year and most of the companies are trading at elevated valuations, any re-rating for Manappuram can be very Swift. It’s just a question of when now, and not if.
P.S.: I own a substantial position here and hence my views may be biased. Please do your due diligence before playing this wonderful story.