Manappuram Finance rebounds over 2% after Q1 profit slump; is a turnaround underway?

Manappuram Shares Today: Shares of Manappuram Finance Ltd rebounded in morning trade on Monday, rising 2.30 per cent to Rs 264.45 on the NSE as of 10:51 a.m., after initially falling post weak Q1FY26 earnings. 

The company reported a 75 per cent fall in net profit to Rs 138 crore for the quarter ended June 2025, compared to Rs 555 crore in the same period last year. Revenue from operations fell 9 per cent year-on-year to Rs 2,262 crore.

While the gold loan segment remained a bright spot with 10 per cent revenue growth (Rs 1,904 crore), the microfinance (MFI) business continued to weigh heavily, with revenues dropping 53 per cent to Rs 361 crore and a 23 per cent QoQ decline in the Asirvad MFI loan book.

Brokerages cautious but hopeful on Manappuram Finance

Jefferies maintained a “hold” rating, raising its target price to Rs 275, citing in-line profit aided by lower MFI provisions, even as net interest income (NII) remained weak. It flagged muted customer growth, lower NIMs, and the wind-down of non-gold loans as key overhangs, but noted valuations were reasonable. Jefferies said the company’s new CEO would play a key role in any potential re-rating.

CLSA retained its “outperform” rating with a target of Rs 260, despite Q1 net profit and pre-provision operating profit missing estimates by 9 per cent. The brokerage highlighted pressure on yields and spreads but aligned with management's view that profitability should return by Q4FY26.

Management commentary and outlook on Manappuram Finance

The company said it is working through a challenging phase but expects stability ahead. Lending rates across high-ticket loans have already been trimmed, with plans to reduce them further to around 18 per cent over the next four to six quarters.

Loan growth of 13 per cent QoQ was driven by higher ticket sizes, though customer additions remained sluggish. Despite near-term challenges, management remains confident the worst is behind.