Manappuram FY '16 consolidated results:
PAT - FY '16 v/s FY '15:
353 cr. v/s 271 cr.
PAT - Q4 '16 v/s Q4 '15 v/s Q3 '16:
130 cr v/s 70 cr. v/s 100 cr.
I have been looking at both Manappuram and Muthoot since a long time. As far as I am concerned (in my biased opinion), going just by the past track record I feel Muthoot business and stock both would give more stability and Manappuram would be slightly more volatile business with opportunities on the upside also but till recently offered more MoS to a value investor; though recent run up in Manappuram has closed that opportunity.
As Ray Dalio says, I would look to have about 10% gold/silver in my portfolio (Jim Rickards calls it a hedge). Actually I am more inclined towards silver which is about 80x cheaper but 16x scarcer - I believe its like a higher beta version of gold. However, we all know the problems of possessing either in physical form. Since its a hedge, I wouldn’t count on the leveraged ETFs also. Ideally I would like to have about 10% of my portfolio in gold/silver mining companies. There are quite a few ETFs for this on US stock exchanges. However, I never went through the hassles of owning any shares outside BSE/NSE. In the end decided to keep 20% each (as a percentage of my portfolio) in Manappuram and Muthoot Finance. The businesses are well run, but the primary reason for buying is the MoS at current prices, derisking of Manappuram business from gold price as already explained, and primarily my bullishness on gold price. I count both of these businesses also as a higher beta on gold. In case gold price goes up (which is my bet) the volumes would hopefully go up by a similar amount just due to increase in gold price - there could be further increase due other factors like new customers, more business from older customers. However if this happens, there would be an inevitable PE expansion, which combined with equity infusion could work wonders.
I did not have the confidence to buy Manappuram before 3 years when it went below 10 Rs. Finally when I got another opportunity in last 6-8 months, I got anchored to the price of 22, and then 26. Eventually when I had more funds available which I was sure I wanted to deploy in these 2 stocks, I bought full quantity which I wanted in Muthoot (again price anchoring bias) since Muthoot was not going up much, whereas Manappuram had run up quite a bit and I was greedily hoping that I would get another chance at mouth watering valutations. Finally started buying Manappuram from 37 odd; I believe the valuations are still attractive. Got 90% of desired quantity. This is to show how price anchoring got me stuck.