Monday, October 18, 2010

Mannapuram; Strong operating performance; HOLD; Target Price: Rs160

Manappuram General Finance

Reco: HOLD

CMP: Rs150

Target Price: Rs160

Strong operating performance

·      MAGFIL reported robust numbers on expected lines for Q2FY11 with NII at Rs1.8bn and PAT at Rs602mn, up 26% and 30.4% qoq driven by 47% qoq growth in AUMs

·      Net NPAs (Gold) declined to 0.11% from 0.17% despite sharp growth in AUMs

·      We remain wary of the strong growth in AUMs of MAGFIL. Successful execution to QIP (Rs10bn) and ability to contain NPAs key to justify the recent run up in the stock price

·      Valuations at 2.4x FY12E ABV still attractive with RoEs of 25% (building in the QIP) . We downgrade the stock to HOLD with price target of Rs160

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