Manappuram Finance Shares Decline 2% Amid Narrowing Net Interest Margins in Q4
Manappuram Finance Sees Sharp Turnaround in March Quarter Earnings
Shares of Manappuram Finance traded lower in early trade on Tuesday despite the company reporting a sharp turnaround in its March quarter earnings. Despite the decline, brokerages remained constructive on the stock after the results.
According to the latest NSE data, Manappuram Finance stock was trading at Rs 299.95, down Rs 5.20 or 1.70 per cent, in Tuesday morning trade. The gold loan financier reported a consolidated net profit of Rs 404 crore in Q4 FY26, compared with a loss of Rs 191 crore in the same quarter last year.
Key Highlights of Manappuram Finance's Q4 FY26 Results
| Metric | Q4 FY26 (Actual) | Q4 FY25 (Actual) | Change (%) |
|---|---|---|---|
| Net Interest Income | Rs 1,504.3 crore | Rs 1,465.6 crore | 2.6 |
| Net Profit | Rs 404 crore | Loss of Rs 191 crore | - |
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The company also announced an interim dividend of Rs 0.50 per equity share, equivalent to 25 per cent on the face value of Rs 2 per share. It has fixed May 11, 2026, as the record date to determine eligible shareholders.
Following the quarterly earnings, Jefferies upgraded the stock to 'Buy' and raised its target price to Rs 360, implying a potential upside of nearly 17 per cent from current levels. The brokerage attributed the outperformance to a Rs 130 crore provision write-back after an ECL reset at Asirvad.
Jefferies noted that assets under management (AUM) grew 22 per cent quarter-on-quarter, supported by a recovery in gold loan growth, although margins remained under pressure due to lower yields. The brokerage added that while FY26 profitability was impacted by margin compression and elevated provisions, it believes margins have bottomed out and credit costs have likely peaked.
Motilal Oswal Financial Services highlighted near-term margin pressure but expects stabilization ahead. The brokerage noted that consolidated NIMs declined 95 basis points quarter-on-quarter to 9.8 per cent, while net yields on the standalone business declined 80 basis points quarter-on-quarter to 17.7 per cent.
However, Motilal Oswal Financial Services expects margins to stabilize going forward, with gold loan yields normalizing in the 17.5-18 per cent range after a sustained bout of compression. The brokerage projects NIMs at 10.1 per cent for FY27E and 10.2 per cent for FY28E.
Investor Takeaway
Investors should be cautious about the stock's decline despite the company's turnaround in earnings.
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