An initiative as early as in 1949 in the hinterlands of Kerala by Mr VC Padmanaban to provide financial solutions to farmers and fishermen; Today his son, carrying the legacy forward, Mr VP Nandakumar has transformed Manappuram Finance into a multi-dimensional NBFC with a 20 year track record on BSE, and a mission which started in South India, today has branches all across India.
For more info check, http://manappuram.com/
NUMBERS - THE LATEST
Market cap: 6327 crores CMP on Day24 July2016: Rs 75.20 BV: 35.24
Revenue FY16: 2373 cr Net profit FY16: 353 cr FV: 2
POSITIVES
1. Global gold prices after making a low of USD 1084 per ounce has been making a steady upmove towards USD 1400
2. Negative impact due to uncertain regulations towards gold loans and negative perceptions are a thing of the past. Positive outcome of that was the LTV (loan-to-value) of 75% which enhances the risk management
3. New businesses of Manappuram contribute to 12% of their AUM (assets under management), and are well headed towards 25%
4. Net profit shot up almost 100% from 69 cr in Q4FY15 to 124 cr in Q4FY16.
INTERESTING INFO
1. Microfinance AUM (acquired company Asirvad Finance) shot up from 300 crore to almost 1000 crores in approx one year
2. People of India are unique in terms of their love for gold. Manappuram holds 59.6 tonnes of gold assets
3. Manappuram has pioneered the concept of online gold loans. After evaluation, people can store their gold in vaults, and can access loans online
4. Manappuram has popular actors as their brand ambassadors thereby enhancing their brand-recall. Mohan Lal, Venkatesh, Vikram, Akshay Kumar, Puneet Rajkumar and others
NEGATIVES - POSSIBLE RISKS
1. Slowdown in global gold prices could act as a sentiment negative, though the company has taken steps to reduce negative impact of gold price fluctuation.
2. Global market turmoil or negative surprises from China or Europe OR increase in US Fed rates
MY TAKE
Manappuram Finance has already established itself as a leading gold loans financing company over the last decade. With a single line of business, the company has grown its profits from less than 10 crores to 350 crores in approximately 10 years.
Year 2015 was an inflection year for the company, to move to the next level. The company has successfully moved into 3 adjacent areas of business areas, being Microfinance, home loans and commercial vehicle financing.
If the company can repeat what it did with gold loans, in the Microfinance business, this can be a NBFC behemoth over the next 5 year. From the current AUM of approx 12,000 crore moving towards AUM of 20,000 crores, even 25,000 CR looks quite achievable. Compared to other players in this field, this company with great future prospects, is available at reasonable valuations.
Company has future potential to become a multibagger!!
Disclosure: I own shares in Manappuram.
For consultation, commercial collaboration and JV ideas;
you can contact me via zorbayogi9@gmail.com
Important Note: Potential multibaggers are those stocks which have potential to give 100 - 500% profits. Obviously such returns take time. Probably 3 - 4 years or more. Short term volatality is the reality of the stock market and that will always happen. Short term movements(upside and downside) are impossible to predict. Only invest funds that you will not need for the next 3 - 4 years. As long as you buy a stock for the right reason and are convinced about the future prospects of the company, there is no need to worry if the share price goes down and stays down for a period of time after you buy; provided you have followed the cardinal stock market mantra BUY LOW.
Very important note: The objective of this blog is to share knowledge and info about multibagger ideas/opportunities. Neither is this trading website nor an analyst website nor a Buy/Sell call website. For stock market success, always do your home work, own analysis and make your own decisions.
For more info check, http://manappuram.com/
NUMBERS - THE LATEST
Market cap: 6327 crores CMP on Day24 July2016: Rs 75.20 BV: 35.24
Revenue FY16: 2373 cr Net profit FY16: 353 cr FV: 2
POSITIVES
1. Global gold prices after making a low of USD 1084 per ounce has been making a steady upmove towards USD 1400
2. Negative impact due to uncertain regulations towards gold loans and negative perceptions are a thing of the past. Positive outcome of that was the LTV (loan-to-value) of 75% which enhances the risk management
3. New businesses of Manappuram contribute to 12% of their AUM (assets under management), and are well headed towards 25%
4. Net profit shot up almost 100% from 69 cr in Q4FY15 to 124 cr in Q4FY16.
INTERESTING INFO
1. Microfinance AUM (acquired company Asirvad Finance) shot up from 300 crore to almost 1000 crores in approx one year
2. People of India are unique in terms of their love for gold. Manappuram holds 59.6 tonnes of gold assets
3. Manappuram has pioneered the concept of online gold loans. After evaluation, people can store their gold in vaults, and can access loans online
4. Manappuram has popular actors as their brand ambassadors thereby enhancing their brand-recall. Mohan Lal, Venkatesh, Vikram, Akshay Kumar, Puneet Rajkumar and others
NEGATIVES - POSSIBLE RISKS
1. Slowdown in global gold prices could act as a sentiment negative, though the company has taken steps to reduce negative impact of gold price fluctuation.
2. Global market turmoil or negative surprises from China or Europe OR increase in US Fed rates
MY TAKE
Manappuram Finance has already established itself as a leading gold loans financing company over the last decade. With a single line of business, the company has grown its profits from less than 10 crores to 350 crores in approximately 10 years.
Year 2015 was an inflection year for the company, to move to the next level. The company has successfully moved into 3 adjacent areas of business areas, being Microfinance, home loans and commercial vehicle financing.
If the company can repeat what it did with gold loans, in the Microfinance business, this can be a NBFC behemoth over the next 5 year. From the current AUM of approx 12,000 crore moving towards AUM of 20,000 crores, even 25,000 CR looks quite achievable. Compared to other players in this field, this company with great future prospects, is available at reasonable valuations.
Company has future potential to become a multibagger!!
Disclosure: I own shares in Manappuram.
For consultation, commercial collaboration and JV ideas;
you can contact me via zorbayogi9@gmail.com
Important Note: Potential multibaggers are those stocks which have potential to give 100 - 500% profits. Obviously such returns take time. Probably 3 - 4 years or more. Short term volatality is the reality of the stock market and that will always happen. Short term movements(upside and downside) are impossible to predict. Only invest funds that you will not need for the next 3 - 4 years. As long as you buy a stock for the right reason and are convinced about the future prospects of the company, there is no need to worry if the share price goes down and stays down for a period of time after you buy; provided you have followed the cardinal stock market mantra BUY LOW.
Very important note: The objective of this blog is to share knowledge and info about multibagger ideas/opportunities. Neither is this trading website nor an analyst website nor a Buy/Sell call website. For stock market success, always do your home work, own analysis and make your own decisions.
