Manappuram General Finance & Leasing (MGFL) is India's 2nd largest non-bank gold finance firm with 7% share in organized gold loan market.
Gold loan financing is an under–penetrated, fragmented market – India holds about 10% of the world’s gold stock (by value), but loans are only ~1.2% of the
gold held. The organized gold loan market is expected to grow at 30-35% yoy over the next few years and MGFL should benefit the most given its rapidly
increasing scale, expertise, brand equity and niche servicing.
The company enjoys healthy asset quality with net NPLs <0.2% owing to strong risk controls and sentimental value of collateral for borrower and; 4) superior expected returns of 4.9% RoA and +22% RoE.
Manappuram General Finance & Leasing is expected to report an EPS of Rs 12 for March-12. Investors can BUY for 12 Months with a target price of Rs 180.
