Manappuram Fin. (MANAPPURAM)

FairStock Score: 45/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Latest quarter still earned ₹239 Cr net profit on ₹2,353 Cr sales, showing some surviving earning power.
• Promoter holding at 35.25% gives meaningful skin in the game.
• ROCE of 11.03% suggests the underlying capital can earn a decent return if conditions improve.
• Dividend yield of 1.24% indicates some cash is still being returned to shareholders.

Concerns

• Profit growth collapsed by 79.27% and sales declined by 8.11%, showing fundamental deterioration.
• Valuation is expensive: P/E 58.74, EV/EBITDA 708.21, and price is far above Graham Number of ₹126.21, creating a negative margin of safety of -124.43%.
• Financial stress is visible: negative free cash flow of ₹592 Cr, debt/equity of 2.90, Altman Z-score of 1.02, and Piotroski F-score of 4/9.
• ROE is only 3.28%, yet the stock trades at 1.99 times book value, offering poor return for the price paid.

AI Analysis

When I look at Manappuram Finance, I see a business that is unquestionably in trouble. The numbers say sales fell 8.11% and profits collapsed 79.27%. At ₹292.85, the market is paying 58.74 times earnings for a company whose return on equity is a thin 3.28%. That is not value investing; that is hope. The balance sheet compares poorly to what I would need. Debt-to-equity stands at 2.90, free cash flow is negative at ₹592 Cr, and the Altman Z-score of 1.02 puts the company in the danger zone. The Piotroski F-score of 4/9 further tells me the financial health is deteriorating. Book value is ₹146.88, so a P/B of 1.99 gives no margin of safety; Graham's number, at ₹126.21, is only 43% of the current price. I cannot call this undervalued when the margin of safety is minus 124%. Still, I don't dismiss the franchise entirely. The latest quarter booked ₹2,353 Cr of sales and ₹239 Cr of net profit, so there is some earning power surviving. Promoters own 35.25%, giving them skin in the game, and the 1.24% dividend yield proves they are at least returning a little cash. ROCE of 11.03% is respectable if it can be sustained. But the market cap of ₹23,975 Cr demands a big recovery. I need evidence that the fall in profits is a cycle, not a permanent impairment. The valuation gives me no cushion. In Ben Graham's language, this is a speculation: a bet that earnings and cash flow will rebound dramatically. I prefer a margin of safety. This stock offers negative margin of safety today, so I would leave it on the shelf and wait for either a much lower price or concrete proof of a turnaround.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer