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Manappuram Finance Q3 FY21 First Cut - `Better than expected` by Yes Securities
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Below are Views On Manappuram Finance Q3 FY21 First Cut - ‘Better than expected’ by Yes Securities
* A large 26% earnings beat – reported PAT at Rs4.83bn v/s estimated at Rs3.83bn
* NII came in 8% higher than forecasted on both higher interest income (suggesting better AUM growth) and lower interest outgo (reflecting the cost of funds reduction)
* A tight leash on opex continues - was flat qoq and lower 5% yoy
* Surprisingly, the credit cost was significantly lower (more clarity here from PPT will help in understanding the quality of earnings beat)
While the stock could react positively to the results, more needs to be understood on two fronts, tonnage growth in gold loans and collection efficiency/stress manifestation in MFI and CV book. Valuation is undemanding at 1.2x FY23 P/ABV.
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