Manappuram Finance Shares Fall 4% Despite Bullish Brokerages: Here’s Why

Manappuram’s Strong Quarter Meets a More Cautious Credit Read

Profit and assets under management surged, but rising early-stage stress in short-tenure gold loans tempered the market’s response.

A sharp increase in profit, revenue and lending assets

The gold-loan-focused non-bank lender reported consolidated net profit of ₹701 crore for Q2 FY27, up 222.90% year on year from ₹217 crore. Revenue from operations increased 46.2% to ₹3,356 crore, compared with ₹2,296 crore in the year-earlier quarter. These figures point to substantial year-on-year growth, although the scale of the profit increase should be read alongside the much lower comparison base.

Assets under management reached ₹73,303 crore as of September 30, 2026, a 60.1% increase from a year earlier. Gold-loan AUM rose 92.5% to ₹60,640 crore, while non-gold businesses made up 17.27% of consolidated AUM. The mix shows gold loans remain the dominant source of lending assets even as the company has other businesses contributing to its portfolio. The board also declared an interim dividend of ₹1 per equity share, with a face value of ₹2.

Delinquency trends explain the cautious share reaction

The more immediate concern was asset quality. Standalone GS-3 and NS-3 delinquency ratios rose sequentially by 20 basis points and 12 basis points, respectively, to 1.8% and 1.2%. The company also reported gold GS-2 at about 5%, up from 0.5% in the June quarter.

The reported increase was linked to short-tenure loans. Customers accustomed to repaying through bullet payments are finding it difficult to adjust to monthly servicing, a trend the company said was in line with the industry. For investors, the distinction matters: strong loan growth can lift income, but the ability to manage repayment stress will influence how much of that growth translates into sustainable earnings. Whether the higher early-stage delinquency persists is therefore an important monitorable.

Brokerages see earnings potential, with risks still in view

Jefferies maintained a Buy rating and raised its FY27-28 earnings-per-share estimates by 3-4%, factoring in lower AUM growth, better net interest margins, lower operating expenses and higher credit costs. It expects customer and branch additions to support a 17% AUM compound annual growth rate over FY26-28, while noting that a higher cost of funds could weigh on margins. The brokerage also pointed to the loan-to-value buffer as a factor that could limit loan losses.

Jefferies set a ₹400 target price and described valuations as reasonable at 1.4 times estimated FY28 book value. Equirus Securities revised its FY27 and FY28 estimates upward after what it described as strong Q2 and first-half performance, but lowered its target to ₹401 from ₹435 and retained a LONG rating. It flagged rising competition in gold loans and increasing delinquencies in the gold book as key risks. These are brokerage views, not assured outcomes; the targets depend on earnings and valuation assumptions.

What investors should watch after the results

The shares touched ₹308 on the BSE, down 3.8% from the previous close of ₹320.25, and were trading at ₹310.40, lower by 3.08%, at 10.57 am. The Sensex was down 0.18% at the time. The contrast suggests the company-specific credit-quality concern was more prominent than the broader market decline, though the figures represent an intraday snapshot rather than a full-session result.

Jefferies also noted that spot gold was down 7% since September-end and could remain rangebound in the near term amid Fed rate hikes. That is a brokerage assessment, but it adds another variable to monitor alongside loan growth, funding costs and delinquencies. The next test for the bullish view is whether expansion can continue without a sustained deterioration in repayment quality.

Key Highlights

• Q2 FY27 consolidated net profit rose 222.90% year on year to ₹701 crore.
• Revenue from operations increased 46.2% to ₹3,356 crore.
• AUM grew 60.1% to ₹73,303 crore, with gold loans accounting for most of the portfolio.
• Gold GS-2 rose to about 5% from 0.5% in the June quarter, amid adjustment to monthly repayments.
• Jefferies retained Buy; Equirus retained LONG, with both brokerages flagging credit or competitive risks.

Investor Note: Manappuram’s growth and brokerage outlook are encouraging, but the rise in gold-loan delinquency warrants close attention. Investors may want to assess whether repayment stress stabilises before treating the quarter’s profit growth as a durable trend.