Manappuram as an investment candidate in the NBFC sector is impeccable

Kerala-based gold finance company Manappuram Finance has entered the housing finance segment, acquiring Jaypee Hotels’ Milestone Home Finance. The move is reflective of the huge interest in the housing finance space, owing to low loan defaults, a large untapped market and attractive returns on equity.
Manappuram has a finger in almost all the pies. Apart from loans against gold, which is its mainstay, Manappuram also has its finger in micro-finance, SME loans and housing finance.

“Home finance segment provided a good business diversification opportunity,” V. P. Nandakumar, the promoter cum CEO of Manappuram Finance, revealed.

(Image Credit: Business Standard)

Impact on demonetization is exaggerated: V. P. Nandakumar

V. P. Nandakumar, the promoter cum MD and CEO, was at pains to emphasize that not only was Manappuram Finance not adversely affected by demonetization, but it would benefit by the shift from the unorganized sector to the organized sector.

V. P. Nandkumar increases stake in Manappuram Finance

V. P. Nandkumar has put his money where his mouth is. To prove his point that the stock price has been unfairly beaten down, he has bought 2.52 lakh shares on 17th November and 1.63 lakh shares on 20th December. Nandakumar’s personal holding stands at about 28.21% while the promoter holding stands at 34.45% as of 31st December 2016.

Buy recommendation of Nirmal Bang (Target price: Rs. 145)

Nirmal Bang has recommended a buy on the logic that “With likely strong growth in AUM, stable margins, contained credit costs and operating as well as financial leverage to kick in, we expect RoA/RoE to improve further by 90bps/840bps to strong levels of 3.8%/21.6%, respectively in FY19E”.
Nirmal Bang has foreseen a target price of Rs. 145 for the stock, which is a whopping upside of 147%.
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