Manappuram Finance Ltd. has recently been in the spotlight due to significant fluctuations in its share price and various market dynamics. As of October 18, 2024, the stock closed at ₹153.27, marking a steep decline of 13.57% from its previous close of ₹177.33. This downturn is part of a broader trend, with the stock experiencing a 27.08% drop over the past month alone.
Main Points
- Current Price: ₹153.27
- 52-Week Range: ₹125 (low) – ₹230 (high)
- Market Capitalization: Approximately ₹12,973.31 crores.
From a technical standpoint, Manappuram Finance is currently trading below its 50-day and close to its 200-day moving averages. For any upward movement, it needs to surpass the 50-day moving average level, which currently stands at around ₹186.96.
| Level | Price (₹) |
|---|---|
| First Support | 186.96 |
| Second Support | 184.63 |
| First Resistance | 193.07 |
| Second Resistance | 196.85 |
The Relative Strength Index (RSI) is at 29.81, indicating that the stock may be oversold, while the Money Flow Index (MFI) is at a low of 15.42.
Manappuram Finance has shown an annual revenue growth of approximately 32.15%, significantly outpacing its three-year compound annual growth rate (CAGR) of 11.73%. Despite this positive growth in revenue, the stock has underperformed compared to its peers in the Nifty Midcap and Financial Services sectors over the past three years, returning -22.36% against Nifty Midcap’s +77.79%.
Key Financial Metrics
- PE Ratio: 5.77
- Price/Sales Ratio: 1.66
- Price to Book Ratio: 1.30.
Bearish Reasons
Several factors contribute to the bearish sentiment surrounding Manappuram Finance:
- Regulatory Challenges: The Reserve Bank of India (RBI) has imposed stricter regulations on non-banking financial companies (NBFCs), including Manappuram Finance, which has affected investor confidence.
- High Interest Expenses: The company allocates a significant portion of its operating revenues—32.39%—to interest expenses, which could impact profitability in a rising interest rate environment.
- Market Sentiment: Recent market trends have shown a decline in investor interest due to overall bearish conditions in the financial sector.
Investor Recommendations
Despite recent challenges, analysts remain cautiously optimistic about Manappuram Finance’s long-term prospects:
- A consensus among analysts suggests a “Buy” rating for the stock, with eight out of fourteen recommending a strong buy and four advising to buy.
- The expected target price among analysts is around ₹230, indicating potential upside from current levels.
Recent Developments
In recent news, Manappuram Finance’s share price was notably affected by RBI’s restrictions on several NBFCs due to governance issues and improper valuation practices. Furthermore, the company’s performance in gold loans remains strong, which is crucial given that it is one of their primary services.
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
