Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Takeaways
Growth likely to remain strong
In 1QFY12 Manappuram Finance's (MGFL) disbursements grew 42% QoQ and gold
loan AUMs grew 20% QoQ.
The 20% QoQ increase in gold loan AUMs could be broken down into a 13% volume
increase and ~7% value increase.
Notwithstanding the current macro-environment, the management maintained its
guidance of reaching INR120b AUM (INR90b as on June 2011) by FY12 translating
into YoY growth of ~60%.
Plans to add 500 branches in FY12
The management expects to add 500 branches in FY12, of which 216 new branches
were added in 1QFY12.
Branch addition for the year is likely to be front loaded.
Of the total, 300 new branches are likely to be added to support business
requirements of existing branches.
Margins likely to remain stable
The management is confident of maintaining margins at 1QFY12 levels if policy
rates remain at current levels.
Incremental cost of borrowings is 12.5-13% and yields are at ~26%.
Asset quality likely to remain healthy
Gross NPAs in 1QFY12 were 0.5% v/s 0.3% in 4QFY11.
The management expects asset quality to remain healthy. A steep increase in gold
prices will provide cushion in terms of asset quality.
Other highlights
Margin compression in 1QFY12 is likely to be made up by a decline in the opex-toasset
ratio.
The management expects to bring down the opex-to-asset ratio to ~6% from 7% in
FY11 and targets to maintain RoA at ~4.5%.
With CAR of 22%, MGFL remains adequately capitalized to achieve the desired
growth rate.
Valuation and view
We believe MGFL is well positioned in a niche business segment and has the domain
expertise and the required platform to scale up its business to the next level. However,
regulatory uncertainty securitization of assets could be an overhang on the stock.
Not Rated.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Takeaways
Growth likely to remain strong
In 1QFY12 Manappuram Finance's (MGFL) disbursements grew 42% QoQ and gold
loan AUMs grew 20% QoQ.
The 20% QoQ increase in gold loan AUMs could be broken down into a 13% volume
increase and ~7% value increase.
Notwithstanding the current macro-environment, the management maintained its
guidance of reaching INR120b AUM (INR90b as on June 2011) by FY12 translating
into YoY growth of ~60%.
Plans to add 500 branches in FY12
The management expects to add 500 branches in FY12, of which 216 new branches
were added in 1QFY12.
Branch addition for the year is likely to be front loaded.
Of the total, 300 new branches are likely to be added to support business
requirements of existing branches.
Margins likely to remain stable
The management is confident of maintaining margins at 1QFY12 levels if policy
rates remain at current levels.
Incremental cost of borrowings is 12.5-13% and yields are at ~26%.
Asset quality likely to remain healthy
Gross NPAs in 1QFY12 were 0.5% v/s 0.3% in 4QFY11.
The management expects asset quality to remain healthy. A steep increase in gold
prices will provide cushion in terms of asset quality.
Other highlights
Margin compression in 1QFY12 is likely to be made up by a decline in the opex-toasset
ratio.
The management expects to bring down the opex-to-asset ratio to ~6% from 7% in
FY11 and targets to maintain RoA at ~4.5%.
With CAR of 22%, MGFL remains adequately capitalized to achieve the desired
growth rate.
Valuation and view
We believe MGFL is well positioned in a niche business segment and has the domain
expertise and the required platform to scale up its business to the next level. However,
regulatory uncertainty securitization of assets could be an overhang on the stock.
Not Rated.
No comments:
Post a Comment