Posted on February 14, 2025, by Niftynews
Shares of Manappuram Finance, Fusion Microfinance, IIFL Finance, and Repco Home Finance saw sharp declines following disappointing Q3 results. The stock price movements reflect growing concerns among investors in the financial sector, with these companies facing several headwinds.
Stock Price Movements on February 14, 2025
- Manappuram Finance Ltd: Shares fell by 6.4%, reaching a low of ₹181.80 on the BSE.
- IIFL Finance Ltd: Shares declined by 2.73%, trading at ₹322.30.
- Fusion Microfinance Ltd: A drop of 3.86% brought shares to ₹163.
- Repco Home Finance Ltd: Shares slipped 2.28%, ending at ₹349.15.
These declines come after each company reported weaker-than-expected financial results for the December quarter, which had a significant impact on their stock prices.
Q3 Results and Market Sentiment
Manappuram Finance Ltd: A Challenging Quarter
Manappuram Finance‘s quarterly results revealed a 52% YoY drop in consolidated PAT, which came in 44% below analysts’ expectations. Despite a 10% growth in NII, the company missed the pre-PPoP estimate by 9%. As a result, MOFSL reduced its FY25-FY27 PAT estimates and lowered the target price to ₹215, maintaining a Neutral rating.
IIFL Finance Ltd: Weak Results Amid IT Raids
IIFL Finance saw a dramatic 85% YoY drop in PAT, while NII fell 22% YoY. The decline was attributed to lower assignment income and fewer gains from fair value changes. Additionally, the company is dealing with IT raids across its offices and key employee residences, including that of Nirmal Jain, affecting investor sentiment. However, IIFL‘s gold loan portfolio showed strong growth, suggesting long-term potential in this segment. The target price has been revised to ₹415.
Repco Home Finance Ltd: Mixed Results but Attractive Valuations
Repco Home Finance showed a 7% increase in PAT, which was in line with expectations. However, operating expenses surged by 31% YoY, raising concerns about the company’s ability to scale up its loan growth. Despite attractive valuations at 0.5 times FY27E P/BV, MOFSL remains cautious, with a revised target of ₹400.
Fusion Microfinance Ltd: Net Loss and Slow Growth
Fusion Microfinance reported a net loss in Q3, primarily due to NIM contraction and interest income reversals. The company has also reversed its net Deferred Tax Assets (DTA). Despite challenges, Fusion is awaiting regulatory approval for its rights issue, which could provide some future growth potential. Analysts expect 3% AUM CAGR and a PAT CAGR of -11% over the next few years, with a Neutral rating and a target price of ₹175.
Investor Outlook: What’s Next for These Stocks?
While the financial sector faces challenges due to economic slowdown and regulatory scrutiny, certain companies like IIFL Finance show resilience in the gold loan market. The weak performance of Manappuram Finance and Fusion Microfinance raises questions about their growth potential in the short term.
Repco Home Finance, despite facing higher operating costs, could be attractive to long-term investors given its value and attractive valuations.
For now, investors should closely monitor quarterly results, regulatory updates, and the overall economic environment before making any investment decisions in these financial stocks.
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Conclusion: Stay Cautious with Financial Stocks in 2025
The sharp declines in the stock prices of Manappuram Finance, IIFL Finance, Repco Home Finance, and Fusion Microfinance today reflect investor concerns after their Q3 results. With a mix of weak performance, regulatory challenges, and economic slowdown, investors may want to stay cautious in the financial sector.
