Posted on February 17, 2025, by Niftynews
Manappuram Finance share price witnessed a significant 8% jump after exiting the F&O ban list, signaling renewed bullish momentum. The stock opened at ₹182.05 and reached an intraday high of ₹193.60, indicating a strong upward trend. With analysts recommending buying at ₹185-188, targeting ₹197-205 with a stop loss at ₹174, should you consider this stock for your portfolio?
Manappuram Finance: A Sharp Rebound After Exiting F&O Ban
On Monday, February 17, 2025, Manappuram Finance saw a significant rebound after exiting the F&O ban list. The stock has been volatile in recent weeks, having experienced a sharp decline from ₹209.35 to ₹168.83 last week. This gap-up opening today is viewed as a positive sign, with traders noting a reversal from the support of the Middle Bollinger Band and the 100-EMA on the weekly chart. Additionally, the stock is holding steady above the 200-day Exponential Moving Average (EMA), which further supports the bullish trend.
However, market experts have pointed out that the Relative Strength Index (RSI) is around 49, with a negative crossover, suggesting that while the stock is bullish, there might be a short-term correction before it continues to rise.
Technical Indicators and Buy Recommendations
Sachin Gupta, Senior Research Analyst at 5paisa, believes that the stock presents a good buying opportunity in the range of ₹185-188, with a target of ₹197-205. A stop loss at ₹174 has been advised to protect against further downside risk. Analysts recommend a cautious approach, suggesting that investors watch for a potential breakout above ₹193.60 for further gains.
Manappuram Finance Q3 Results: A Setback in Microfinance
While Manappuram Finance shares have rebounded, the company’s Q3FY25 results were disappointing. The company’s consolidated net profit fell by 50%, dropping to ₹282 crore. The microfinance segment has been hit hardest, with bad loans and provisions surging fourfold to ₹473 crore. This was due to a loan disbursement ban that lasted a quarter, coupled with a 5% decline in revenue from the microfinance segment, down to ₹665 crore.
On February 14, 2025, Manappuram Finance saw a 5% drop, closing at ₹183 per share after the company’s quarterly results. However, with the lifting of the F&O ban and a strategic shift towards gold loans and secured non-gold loans, analysts are cautiously optimistic about the company’s prospects going forward.
Brokerage Views and Outlook for Manappuram Finance
Despite the challenges faced by Manappuram Finance in its microfinance operations, Axis Securities has upgraded its rating for the company from hold to buy, setting a target price of ₹220. The brokerage expects the company’s margins to hold steady at 13-13.2% over FY26-27 and foresees a gradual improvement in its portfolio mix, with a shift toward more secured assets. This shift should help lower credit costs and improve profitability over the medium term.
The near-term pressure on credit costs and the focus on the gold loan segment are expected to support the company’s growth, making it an attractive stock for long-term investors.
Should You Buy Manappuram Finance Share Price?
In summary, the Manappuram Finance share price has seen a notable rebound following its exit from the F&O ban list. Although its recent Q3 results were disappointing, the company’s shift toward secured gold loans and strategic growth in non-gold loans could yield long-term benefits. Given the attractive valuations and positive medium-term outlook, analysts recommend buying Manappuram Finance shares in the ₹185-188 range with a target price of ₹197-205.
Key Points:
- Manappuram Finance share price jumped 8% after exiting the F&O ban list.
- Analysts recommend buying at ₹185-188, with a target of ₹197-205.
- Q3 results showed a decline in profit, but long-term prospects remain strong with a focus on gold loans.
