Manappuram Finance

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Major reason for lower opex in Muthoot is their AUM per branch which is very high compared to any gold financier. Muthoot has a per branch AUM of 14.2 cr, whereas Manappuram has 5.6 cr, IIFL has 8.8 cr, FedFina has 7.1 cr. I don’t know how Muthoot is able to do that. Even if I assume they have bigger branches compared to other players, their employee expenditure is proportionally low compared to other players, which signifies they do better in all parameters.


Manappuram FY23 Total Employees: 63,760
Muthoot FY23 Total Employees: 27,273

That is a stark difference, even if we take out Microfinance Employees (close to 16,000)

I believe one reason for the same is the loan tenure which was 3 months for a very long time which required more employees to deal with customers and at the same time it kept the AUM low because employees were focused on renewing the loans rather than getting new loans. One big reason for IIFL’s growth I believe is that their loan tenure is 24 months which makes sure that the churn of loan book is low. Muthoot’s tenure is 12 months


Morgan Stanley update

IDBI research - expecting price 205
Morgan Stanley expecting price 200

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Hi Bharath

Will you please post the Q2FY24 presentation pdf here
The link on the Manappuram official website has stopped working

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Concall Notes - Nov 2023

Financial Results:

  • Q2 FY24 net profit of INR 561 crores, up 37% YoY

Gold Loan Business:

  • Gold loan AUM increased by 8.4% YoY and 1% sequentially
  • Maintaining price discipline in gold loans at around 22%+
  • Expecting growth of 8% YoY in gold loans
  • Auction surplus has come down to around INR 30 crores
  • No significant delinquencies in gold loan business
  • No stress observed in gold loan portfolio
  • Gold loan yields expected to stabilize around current levels (22-22.5%)

Other Loan Businesses:

  • Standalone AUM grew by 20.2% YoY, consolidated AUM increased by 27% YoY
  • Microfinance subsidiary, Asirvad, recorded a profit of INR 118 crores, up 109% YoY
  • Vehicle finance business saw a 66.7% YoY increase in AUM
  • Home loan business reported a 41% YoY growth in AUM
  • Non-gold verticals now account for 47% of total AUM
  • Asirvad Microfinance filed DRHP for fundraising, growth to be supported by current profits

Dividends and Payouts:

  • Dividends increased and payouts raised to INR 0.85 during the quarter

Funding and Liquidity:

  • Resolved issues related to funding and liquidity
  • Expecting cost of funds to remain reasonable

Future Outlook:

  • Expecting similar growth in Q3 due to festive and marriage season

Other Financial Highlights:

  • Net gain on fair value changes and net gain on de-recognition of financial instruments reported in consolidated financial results
  • Fee income from selling household products to MFI customers

you can access from here, the company has updated their website thats why the links are not working

@maheshkumar - Remember how the stock up from pessimism to optimism? Price changes perception! With the Aasirvad DHRP in place, I believe a lot of re-rating triggers in place.


Absolutely @Rupee_Millionaire
Rerating on board as visibility is visible to market now
Where else you can find near book value stock growing at 20% at PE of single digit…a clear cut recipe for rerating

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Current rally in gold finance companies can be attributed to rally in Gold prices which is likely to sustain for some time given the global scenario and interest rate situation. Good read.

Manappuram has traded cheap for a reason. It used to be number 2 in gold finance and now has lost that spot to few competitors. The real rerating will happen (quickly) if the promoter changes. Next generation is not interested and the existing promoter may be looking to sell. Time is very good to get decent exit valuation. Cupid Ltd. stock nearly tripled in matter of few months once the promoter exited. Good business with growth oriented promoter gets rerated quickly. Will be interesting to see how this story plays out.

Technical experts will know beforehand that something is happening based on price volume.

Discl: Invested


Mr.Nandakumars current directors daughter is involved in the company promoter might not sell

exit of promotors wont result in rerating of company unless they are bad or the new promotors are very good

lets see

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I feel rerating will happen due to

  • yields are maintained at similar levels
  • single digit PE and near book value while company over long run is growing in double digit
  • gold price increase ( my prediction is 2500 USD in 2024 ie 25% increase in gold prices )
  • non gold portfolio growth benefit
  • gold loan growth
  • improving operating efficiency
  • increase in gold loan branches
  • competition slowing down

Derating will happen

  • if growth stops or slows
  • gold price goes down
  • regulatory changes
  • pandemic
  • intensified competition

It’s multi factorial ,so far cheap valuation offers the cushion from major downside

I am biased towards rerating
So far price movement is in strong favour

Management is forecasting growth, slowly some market participants are believing that growth can sustain at current yields
Once market gets full belief then real gain in price will take place
Regarding valuation Manappuram is trading at half the PE and half the price to book than muthoot ( both trading at half the price to book of their historical best )

Current valuation:
Manappuram PE 7.4
Muthoot PE 15.5

Manappuram price to Book 1.3
Muthoot price ti book 2.6

**Historical best :
Manappuram max PE was 20 and price to book was 3.3

Muthoot max PE was 17.5 and max Price to book was 5.2



Post ANALYST MEET PRESENTATION (19/12/2023) all brokerages have upgraded their views and valuations for Manappuram


Manappuram Finance’s potential for rerating is supported by

  1. its balanced 20:20:20 financial metrics (yield, growth, and ROE),
  2. benefits from gold prices exceeding $2,000 USD and still trending up
  3. Its diversified portfolio with a 50:50 mix of gold and non-gold assets
  4. strong dividend policy
  5. the global trend of including gold as a risk hedge in portfolios further enhances its appeal.
  6. cheap valuations ( PE single digit ) ( near book value )

Signs of rerating as market start realising growth is possible at these yields with diverse products
All discussed here on this forum before ,is now coming in brokerage reports :

Overweight rs 210 Morgan Stanley


GOLD WORLD WIDE inclusion in portfolio

Many tailwinds ahead


the prices are high, frauds will increase. We may just see banks retreat

Muthoot commentary suggests uptick in smaller size gold loans. This can be a huge positive for Manappuram whose main market is small ticket gold loans.

Disclosure: Invested in Manappuram (bought shares in last 30 days)


not sure what her exact accomplishments are at the company though,%202023_RR_334276.html

rating rationale

Gold to enter 2024 with sights set on record highs By Reuters


  • Gold prices are on the rise.
  • Gaining acknowledgment as a diversified NBFC.
  • Non-gold portfolio includes high-yield products.


  • Banks putting the competition
    (Management believes bank customers have higher ticket sizes, while NBFC primarily deals with smaller ticket sizes.
    Anticipating banks will eventually face operational fatigue in the gold loan business.
    Anticipating banks diverting efforts away from smaller gold loans as they focus on larger non gold loans.)
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