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Manappuram Finance Ltd

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Manappuram Finance Ltd

 

Manappuram Finance Ltd
Finance (including NBFCs)

FV – Rs 2; 52wks H/L – 55.5/19.75; TTQ – 3.96 Lakhs; CMP (May 31, 2016) – Rs 53.5;

Market Cap – Rs 4500 Crs

Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

 
Equity Capital

Net worth

Long Term
Debt

Total
Sales
PAT
BV
(Rs)

EPS (Rs)

P/E

Industry
P/E

P/BV

Promoter’s
Stake

Beta
Consolidated 168.24 2758 1600 2360 353 33 4.2 12.73 51.98 1.6 33.69 1.13
Standalone 168.24 2737 1115 2213 337 33 4.01 12.75 51.98 1.6 33.69 1.13

 

Valuation Parameters

  1. EV/EBITDA: 3.54
  2. EV/Share: Rs 65
  3. EV/Sale: 2.3
  4. Market Cap/ Sale: 1.89
  5. Debt to Equity: 0.58
  6. RoE: 12.8%
  • March quarter PAT stood at Rs 130.7 Crs on a consolidated basis, up by over 86.6% Q-o-Q. PAT for FY 16 was Rs 353 Crs, up by 30% Y-o-Y. The improvement came on the back of margin improvement due to a reduction in the cost of funds and improvement in yields, along with a stronger than expected growth in overall AUM. Cost of funds came‐off 10 bps Q-o-Q and 150 bps Y-o-Y due to a rating upgrade earlier in the year and lower base rates during the year. Yield has improved 190 bps Y-o-Y as Manappuram has shifted to shorter duration loans because of which the quantum of auction was lower. Auctions this quarter stood just at Rs 190 Crs (1.9% of gold AUM) aided by higher gold prices.
  • The company’s consolidated assets under management also rose to Rs 11433 Crs from Rs 9593 Crs recorded in the previous fiscal year.
  • The recent diversification into new business areas has gained further traction with new businesses now contributing about 12% of its consolidated AUM. Microfinance subsidiary, Asirvad Microfinance Pvt Ltd, had ended the year with an AUM of Rs 82 Crs, representing a growth of 210% over Rs 322 Crs.
  • Commercial vehicle loans and mortgage-based finance (housing loans and loans against property) have contributed Rs 52 Crs to the total AUM. Their contribution in FY 15 was Rs 44.80 Crs.
  • Manappuram Finance fiscal net profit up 30%
  • NBFCs including Manappuram Finance are now targeting short tenure (3 to 6 months) gold loans instead of earlier one year duration loans. By focusing on short-term loans, auction of gold deposited by defaulting customers could come down. And, this helps in protecting margins. Apart from protecting margins, these shorter duration gold loans also help companies by shielding them against the volatility in gold prices that get more pronounced in longer duration loans. NBFCs, banks focus on shorter tenure gold loans to boost margins
  • The company is now looking at increasing its non-loan portfolio. It is aiming at organic and inorganic growth to grow the non-gold loan business, now Rs 1300 Crs. In the next two to three years, it aims to grow it to Rs 4000 Crs. This is being done to reduce concentration risk from gold loans. The Reserve Bank of India has also said it wants large companies to diversify their portfolio, as a single business will lead to this risk. Manappuram Finance looks at inorganic growth to diversify business

 

Bulk Deals:

Date Client Transaction Quantity Traded Price (Rs)
26-Nov-2015 SMALL CAP WORLD FUND INC SELL 8550000 22.30
26-Nov-2015 SMALL CAP WORLD FUND INC SELL 8763979 22.31
15-Sep-2015 WF ASIAN RECONNAISSANCE FUND LTD BUY 14700000 24.61
15-Sep-2015 BEAVER INVESTMENT HOLDINGS SELL 12803803 24.55
11-Sep-2015 ASHISH DHAWAN BUY 9004871 20.20
11-Sep-2015 SMALL CAP WORLD FND INC SELL 14673614 20.23

 

Block Deals:

Date Exchange Quantity Price (Rs) Value (Rs Crs) Time
13-05-2016 NSE 1108092 50.25 5.57 14:29
11-05-2016 NSE 1000445 41.45 4.15 10:40
02-03-2016 NSE 1500339 31.75 4.76 11:53
24-02-2016 NSE 652451 30.70 2 13:49
19-02-2016 NSE 2465727 31.50 7.77 13:18
19-02-2016 NSE 1690592 31.35 5.3 15:22
02-02-2016 BSE 2194355 29.05 6.37 13:01
02-02-2016 NSE 2003749 29.05 5.82 12:31
01-02-2016 NSE 858631 28.35 2.43 14:15
29-01-2016 NSE 2501236 28.35 7.09 10:38
26-11-2015 NSE 4728105 22.30 10.54 11:51
26-11-2015 BSE 8551000 22.30 19.07 11:51
26-11-2015 NSE 4037024 22.65 9.14 11:51
24-11-2015 BSE 952082 22.70 2.16 09:36
04-11-2015 NSE 2000000 23.80 4.76 13:45
04-11-2015 BSE 3500000 23.80 8.33 13:45
30-09-2015 NSE 1000200 24.00 2.4 10:26
22-09-2015 BSE 1051345 23.65 2.49 12:02
15-09-2015 BSE 4110917 25.00 10.28 11:09
15-09-2015 NSE 1200000 24.75 2.97 14:32
15-09-2015 NSE 738950 25.30 1.87 13:18
15-09-2015 NSE 1800022 24.70 4.45 12:27
15-09-2015 NSE 7701659 24.60 18.95 11:51
15-09-2015 NSE 3956068 24.60 9.73 11:09
15-09-2015 NSE 1013880 24.35 2.47 11:12
11-09-2015 NSE 4884641 20.20 9.87 11:12
11-09-2015 NSE 1987265 20.20 4.01 11:11
13-08-2015 NSE 701727 23.25 1.63 14:01
29-07-2015 BSE 900000 26.15 2.35 10:54
28-02-2015 NSE 2369136 34.75 8.23 15:18
19-01-2015 NSE 1000000 33.80 3.38 14:55

 

Overview:

  • Manappuram Finance Limited is a non-banking financial company (NBFC).
  • The Company provides a range of fund based and fee based services including gold loans, money exchange facilities, and others. It is also engaged in the housing finance owing to low loan defaults.
  • It provides customers with credit primarily against their used gold jewellers.
  • The Company’s business areas include gold loan, money transfer, housing finance and foreign exchange.
  • It provides higher amount of loans depending upon the purity, net weight of the gold.
  • The money transfer service is available in all the branches.
  • The Company acts as a money changer, undertaking currency exchanges and sale of travellers’ cheques for a variety of purposes. It operates through 3,293 branches spread across the country.

Housing Finance: Manappuram Finance acquired Milestone Home Finance Company Pvt. Ltd. (Milestone), a company possessing a valid Certificate of Registration from National Housing Bank, as a wholly- owned subsidiary company. Subsequently, the name of company was changed to Manappuram Home Finance Pvt Ltd in September 2014.

Microfinance: Manappuram Finance acquired 85% stake in Asirvad Microfinance Private Limited. Asirvad Microfinance is an 8-year old NBFC – MFI (Non banking financial company – Microfinance Institution) headquartered in Tamil Nadu with operations in the states of Tamil Nadu, Kerala and Karnataka.

Management:

  • Mr V P Nandakumar is the MD and CEO

 

Major Non – Promoter Holdings:

Sr No. Major Non-Promoter % Stake
1 DSP Blackrock Micro Cap Fund 2.61
2 Mousseganesh Limited 1.2
3 BRIC II Mauritius Trading 1.54
4 WF Asian Reconnaissance Fund Limited 4.53
5 Morgan Stanley Asia (Singapore) PTE. 1.74
6 Baring India Private Equity Fund III Listed Invest 9.43
7 Baring India Private Equity Fund II Limited 3.14
8 Merrill Lynch Capital Markets Espana 1.15
9 Ashish Dhawan 2.91

 

Financial Trends ~ Amt in Rs Crs

Particulars FY 16 FY 15 FY 14 FY 13 FY 12 FY 11
Consolidated Standalone Consolidated Standalone Consolidated Standalone Standalone Standalone Standalone
Equity Paid Up 168.24 168.24 168.24 168.24 168.24 168.24 168.24 168.23* 83.38
Networth 2758 2737 2633 2627 2324 2492 2443 2381 1924
Long Term Debt 1600 1115 1642 1550 1455 1455 1361 1072 4871
Total Sales 2360 2213 1986 1976 2100 2100 2217 2616 418
PAT 353 337 271 271 226 226 208 591 283
EPS (Rs) 4.20 4.01 3.23 3.22 2.69 2.69 2.48 7.03 3.36
Book Value (Rs) 33 33 31 31 28 30 29 28 23

 

  • *Note that ~ In FY 12, Company had issued 1:1 bonus shares which resulted in the increase of shares by 416874188 number of equity shares. Also, the Company issued 7404760 shares to its employees under the ESOP 2009 scheme of the Company, resulting in the paid up share capital increasing to Rs 1682306272 in FY 12.
  • The fall in profits in FY 13 was on account of under-recovery of interest amounting to Rs 284 Crs on a specific pool of its portfolio that was booked during the latter half of FY12. The Company also made additional provision amounting to Rs 51 Crs being the reversal of interest booked in FY12. The Company has faced a higher incidence of defaults in this pool after it began realigning its portfolio under the new loan to value (LTV) regime brought into effect in March 2012.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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