Manappuram Falls on Weak Q3
- 14th February 2025
Aaj Ka Bazaar
The S&P 500 closed higher on Thursday, driven by gains in Nvidia, Apple, and Tesla. The rally came after U.S. President Donald Trump outlined a roadmap for implementing reciprocal tariffs on U.S. trading partners. Asian markets were set for a positive start on Friday, buoyed by optimism over the delayed implementation of these tariffs, which raised hopes for further negotiations. Given the strong global cues, domestic equity benchmark indices, Sensex and Nifty 50, are expected to open higher, with Gift Nifty indicating an 87-point rise. Investors will also keep a close watch on the outcome of the Modi-Trump meeting and the Q3 earnings reports scheduled for release today.
Markets Around Us
BSE Sensex -76,184.00 (0.06%)
Nifty 50 – 23,026.00 (-0.02%)
Bank Nifty – 49,327.30 (-0.07%)
Dow Jones – 44,777.55 (0.16%)
Nasdaq – 19,447.60 (1.51%)
FTSE – 8,764.72 (-0.49%)
Nikkei 225 – 39,199.83 (-0.67%)
Hang Seng – 22,303.80 (2.19%)
Sector: NBFC
Manappuram Finance Falls 5% on Weak Q3
Manappuram Finance shares dropped 5% to ₹183 on February 14 after weak Q3 results, mainly due to stress in its microfinance business. The RBI had banned its loan disbursements for a quarter over high pricing and excessive mark-ups, lifting the ban only last month. This led to a 5% drop in microfinance revenue to ₹665 crore, while bad loans and provisions from this segment surged fourfold to ₹473 crore. The company’s net profit halved to ₹282 crore. However, its gold loan portfolio, which makes up 75% of revenue, grew 17%, supported by record-high gold prices. Manappuram also announced an interim dividend of ₹1 per share, with February 21 as the record date. Motilal Oswal kept a “neutral” rating with a ₹215 target, citing profitability and growth concerns. The stock has fallen 8% in six months, lagging behind the Nifty 50’s 4% decline. Analysts project a steady rise in gold loans but slower overall profit growth.
Why it Matters:
Manappuram Finance’s weak Q3 results highlight risks in its microfinance business, with rising bad loans and provisions affecting profitability. Despite strong gold loan growth, overall performance remains under pressure, leading to stock underperformance. Analysts see near-term challenges, making future recovery uncertain.
NIFTY 50 GAINERS
HINDUNILVR – 2349.45 (1.20%)
TATACONSUM – 1035.00 (1.19%)
BRITANNIA – 4937.75 (1.00%)
NIFTY 50 LOSERS
ADANIENT – 2181.00 (-2.84%)
ADANIPORTS – 1089.30 (-2.00%)
DRREDDY – 1204.95 (-1.52%)
Secto: Gems & Jewellery
Senco Gold Falls 18% on Weak Q3
Senco Gold shares dropped 18% on February 14 after reporting weak Q3 earnings, mainly due to a sharp drop in profit margins. The EBITDA margin fell to 3.8% from 11% last year, impacted by higher costs from new subsidiaries, customs duty changes, and gold price volatility. Despite this, revenue hit a record ₹2,100 crore, up 27% year-on-year, driven by strong consumer demand during Dhanteras and Diwali. However, net profit slumped to ₹33.5 crore from ₹101.3 crore last year. Management remains optimistic, expecting EBITDA margins to recover to 7-8% in Q4 and beyond, supported by strong brand positioning and cost efficiencies. Gold prices surged 22% over the past year, but the reduction in customs duty during Q2 helped boost Q3 sales. Senco Gold plans to drive future growth through premium pricing and innovative products while leveraging India’s growing gems and jewelry market.
Why it Matters:
Senco Gold’s sharp margin decline and profit drop raise concerns about rising costs and business scalability. Despite record revenue growth, weak profitability led to an 18% stock decline, impacting investor confidence. The company’s future depends on margin recovery and sustained consumer demand.
Around the World
Asian stock markets traded mostly flat to lower on Friday due to concerns over rising U.S. trade tariffs and persistent inflation. While Wall Street closed strong, uncertainty remained as President Trump signed an order planning higher duties on major U.S. trading partners. Inflation data also fueled worries about prolonged high interest rates. However, Hong Kong’s Hang Seng index jumped 1.6%, driven by a rally in Chinese tech stocks following the release of DeepSeek AI. Australia’s ASX 200 hit a record high, supported by expectations of an interest rate cut next week and rising commodity prices due to cyclone-related supply disruptions. Meanwhile, Japan’s Nikkei 225 and Singapore’s Straits Times index fell slightly, while South Korea’s KOSPI gained 0.4% on strong tech stocks. India’s Nifty 50 futures pointed to a flat open as investors analyzed Trump and Modi’s trade discussions, with concerns over potential U.S. tariffs on Indian imports.
Option Traders Corner
Max Pain
Nifty 50 – 23,200
Bank Nifty – 50,000
Nifty 50 – 23,086 (Pivot)
Support – 22,937, 22,843, 22,693
Resistance – 23,180, 23,329, 23,423
Bank Nifty – 49,490 (Pivot)
Support – 49,145, 48,930, 48,585
Resistance – 49,705, 50,050, 50,265
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