External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>In the last two quarters, MGFL traded off margin/spreads for Gold loan growth.</li><li>This new business strategy helped it cover a lot of lost ground in terms of market share, with a cumulative Gold loan growth of ~24% over 2Q and 3QFY22. This new strategy also meant: elevated advertising/promotion costs and incentives for employees translating in higher operating expenses, and compression in spreads to ~11.5% v/s 14.5-15% under its earlier high yielding business model.</li><li>.</li></ul><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

In the last two quarters, MGFL traded off margin/spreads for Gold loan growth.This new business strategy helped it cover a lot of lost ground in terms of market share, with a cumulative Gold loan growth of ~24% over 2Q and 3QFY22. This new strategy also meant: elevated advertising/promotion costs and incentives for employees translating in higher operating expenses, and compression in spreads to ~11.5% v/s 14.5-15% under its earlier high yielding business model..Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Below estimates led by higher opex and lower spreads

External broker reports(aggregated public sources), Axis Direct

Axis Direct

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Mannapuram witnessed a sharp rebound in the gold loan business in Q2FY22 with a yield tradeoff on high ticket size loans</li><li>With tweaks in its business model, the company has been able to bring back growth in its gold loan book</li><li>However, on attractive valuations and improved growth prospects, we revise our rating from HOLD to BUY with a target price of Rs 230 (1.5x FY24E ABV).</li></ul><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Mannapuram witnessed a sharp rebound in the gold loan business in Q2FY22 with a yield tradeoff on high ticket size loansWith tweaks in its business model, the company has been able to bring back growth in its gold loan bookHowever, on attractive valuations and improved growth prospects, we revise our rating from HOLD to BUY with a target price of Rs 230 (1.5x FY24E ABV).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Manappuram Finance: Gold Loan Growth Picks Up Albeit With Pressure on Margins

<p>PPOP (7% miss) declined by 8% YoY and 15% QoQ to INR6b. Credit costs remained elevated in the MFI subsidiary due to the impact of the second COVID wave. We expect credit costs to remain elevated in 3Q and moderate from 4QFY22 onwards. While MGFL demonstrated greater sequential Gold loan growth (~13% QoQ) by effectively winning over higher ticket Gold loan customers, this has come at the cost of compression in spreads and large incentives paid to employees.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

PPOP (7% miss) declined by 8% YoY and 15% QoQ to INR6b. Credit costs remained elevated in the MFI subsidiary due to the impact of the second COVID wave. We expect credit costs to remain elevated in 3Q and moderate from 4QFY22 onwards. While MGFL demonstrated greater sequential Gold loan growth (~13% QoQ) by effectively winning over higher ticket Gold loan customers, this has come at the cost of compression in spreads and large incentives paid to employees.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Trading off margin and spreads for Gold loan growth

<p>Gold lending is a high moat business and we believe specialists like MGFL will continue to benefit. However, most positives are priced in. We revise our rating from BUY to HOLD with a target price of Rs 185 (1.4x FY23E ABV).</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Gold lending is a high moat business and we believe specialists like MGFL will continue to benefit. However, most positives are priced in. We revise our rating from BUY to HOLD with a target price of Rs 185 (1.4x FY23E ABV).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Manappuram Finance: Gold AUM Decline Disappoints

<p>Compared to our expectation of 3% QoQ decline, the gold loan book declined 6% QoQ. All the other segments delivered sequential loan book growth the most prominent being the MFI segment with 11% growth....</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Compared to our expectation of 3% QoQ decline, the gold loan book declined 6% QoQ. All the other segments delivered sequential loan book growth the most prominent being the MFI segment with 11% growth....Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Gold loan book moderates; MFI performance healthy

India

Manappuram Finance Limited is an Indian non-banking financial company (NBFC) specializing primarily in gold loans. The company has diversified its portfolio to include microfinance, home loans, vehicle loans, and SME lending. It was founded in 1949 and is headquartered in Valapad, Thrissur, Kerala, India.

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Manappuram Finance (MGFL IN)

Below estimates led by higher opex and lower spreads

In the last two quarters, MGFL traded off margin/spreads for Gold loan growth. This new business strategy helped it cover a lot of lost ground in...

Motilal Oswal

Manappuram Finance: Gold Loan Growth Picks Up Albeit With Pressure on Margins

However, on attractive valuations and improved growth prospects, we revise our rating from HOLD to BUY with a target price of Rs 230 (1.5x FY24E ABV).

Axis Direct

Trading off margin and spreads for Gold loan growth

PPOP (7% miss) declined by 8% YoY and 15% QoQ to INR6b. Credit costs remained elevated in the MFI subsidiary due to the impact of the second COVID...

Motilal Oswal

Manappuram Finance: Gold AUM Decline Disappoints

Gold lending is a high moat business and we believe specialists like MGFL will continue to benefit. However, most positives are priced in. We...

Axis Direct

Gold loan book moderates; MFI performance healthy

Compared to our expectation of 3% QoQ decline, the gold loan book declined 6% QoQ. All the other segments delivered sequential loan book growth ...

Motilal Oswal

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