Manappuram Finance rides high on diversification strategy
Gold loan financier Manappuram Finance Ltd’s increased thrust on diversification seems to be striking the right chord with its investors. At its recently held analyst meet, the company’s management said its focus continues to be a diversified NBFC with a 50% asset under management (AUM) contribution from its non-gold loan business. “The management sounded confident of achieving its guidance of 20% CAGR in consolidated AUM over the next few years (largely aided by higher growth in non-gold business) with a sustainable RoE of 20%,” noted analysts from Systematix Shares and Stocks (India) Ltd in a 22 March report.
As such, in the last four trading sessions, the stock has risen nearly 7%. The intense competition and volatility in the gold loan business have weighed on the company’s earnings performance lately.
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