Manappuram Finance Q2 FY27 Results: Shares Fall 4% Despite PAT Surge; CLSA Upgrades to Outperform

Manappuram Finance Q2 FY27 Results: Shares Fall 4% Despite PAT Surge; CLSA Upgrades to Outperform

Deck: Manappuram Finance reported a consolidated net profit of Rs 701 crore for the September quarter of FY27 on November 13. While the stock fell 4.1% during trade, CLSA upgraded the scrip to ‘outperform’ with a revised target price of Rs 370.

Quick Summary

• Entity and Event: Gold loan financier Manappuram Finance Ltd announced its Q2 FY27 financial results on November 13, reporting a significant year-on-year increase in net profit.
• Key Detail: The company’s gold loan assets under management (AUM) surged 92.5% year-on-year to reach Rs 60,640 crore at the end of the September quarter.
• Impact: Total assets under management grew 60% year-on-year to Rs 73,303 crore as of September 2026, according to the regulatory filing.
• Market Reaction: Shares of Manappuram Finance fell 4.1% to Rs 306.7 apiece at 11:45 am on November 13 following the earnings announcement.

At a Glance

• The Move: Manappuram Finance shares declined 4% on November 13 after the company disclosed its financial performance for the second quarter of FY27.
• Main Trigger: While consolidated profit after tax rose to Rs 701 crore, the results were impacted by higher-than-expected credit costs linked to an increase in Stage 2 loans.
• Next Watchpoint: Management has provided guidance for gold loan growth of 30% and a return on assets (RoA) between 3.5% and 4% for financial year 2027.

What Happened?

Manappuram Finance Q2 FY27 results, released on November 13, showed a consolidated profit after tax (PAT) of Rs 701 crore. This figure represents a more than three-fold increase from the Rs 217.31 crore reported in the corresponding quarter of the previous fiscal year. On a sequential basis, the net profit grew by 20% from Rs 585 crore recorded in the June quarter.

As per the regulatory filing, the company’s total income for the quarter ended September 2026 rose to Rs 3,312 crore, compared to Rs 2,275 crore in the year-ago period. Despite the profit growth, Manappuram Finance shares were trading 4.1% lower at Rs 306.7 apiece at 11:45 am on November 13. The company’s total assets under management stood at Rs 73,303 crore as of September 2026.

Why Did It Happen?

The growth in Manappuram Finance Q2 FY27 results was primarily driven by a 92.5% year-on-year surge in gold loan AUM. CLSA noted that the company achieved a 9% beat in pre-provisioning operating profit (PPOP), which was supported by better-than-expected margins. Additionally, gold loan yields improved by 90 basis points during the first half of financial year 2027, while the gold loan book grew 6% sequentially due to a 4% growth in tonnage.

However, the bottom line was affected by higher provisions. CLSA reported that credit costs were higher than anticipated because of an increase in Stage 2 loans, which partly offset the operating profit beat. The brokerage also observed that the company has maintained a balance between growth and margins over the last two quarters while continuing to contain operating expenses effectively.

What Does It Mean for Markets?

Following the announcement, CLSA upgraded the stock to “outperform” from its previous “hold” rating. The brokerage raised its target price to Rs 370 per share from Rs 350, suggesting a potential upside of 16% from the previous closing price. CLSA also increased its PAT estimates for FY27-29 by 1% to 6% based on stronger operating profit expectations, noting that the risk-reward ratio is now favourable after the recent stock correction.

For the full financial year 2027, the management expects gold loan growth to remain at 30%, with yields ranging between 17.5% and 18.5%. While CLSA has factored in one additional repo rate hike from the RBI, it expects the company’s expense ratio to trend downward. The second quarter PAT beat market estimates by 3%, even as the stock faced immediate selling pressure on the reporting date of November 13.

What to Watch Next

• Growth Targets: Market participants will track if the company achieves its guided 30% gold loan growth for financial year 2027.
• Asset Quality: The trend in Stage 2 loans will be critical, as CLSA noted these were responsible for the higher-than-expected credit costs in Q2.
• Yield Stability: Investors will monitor if the 17.5% to 18.5% yield guidance is maintained amidst potential interest rate changes by the RBI.

FAQs

1. What was Manappuram Finance’s PAT for the September quarter of FY27?
As per the results reported on November 13, the company posted a consolidated profit after tax of Rs 701 crore. This is a significant increase from the Rs 217.31 crore recorded in the same quarter of the previous fiscal year.

2. Why did CLSA upgrade Manappuram Finance stock to ‘outperform’?
CLSA upgraded the stock because of a 9% beat in pre-provisioning operating profit and improved margins. The brokerage also raised its PAT estimates for FY27-29 by 1% to 6%, citing a favourable risk-reward profile following the recent stock correction.

3. What is the new target price for Manappuram Finance set by CLSA?
Following the Q2 FY27 results, CLSA raised its target price to Rs 370 per share from the earlier Rs 350. This new target represents a 16% upside from the stock’s previous closing price.

4. How much did Manappuram Finance’s gold loan AUM grow in Q2 FY27?
Gold loan assets under management (AUM) surged by 92.5% year-on-year to Rs 60,640 crore. The gold loan book also saw a sequential growth of 6%, supported by a 4% increase in tonnage.

5. What is the management’s gold loan growth guidance for financial year 2027?
The management has guided for gold loan growth of 30% for FY27. They also expect yields to be between 17.5% and 18.5%, with a return on assets (RoA) target of 3.5% to 4%.

6. What was the total assets under management (AUM) for Manappuram Finance as of September 2026?
The company’s total assets under management stood at Rs 73,303 crore as of September 2026, registering a year-on-year growth of 60%.

Source Note and Disclaimer

This article is based strictly on the financial disclosure and brokerage report dated November 13, 2026, regarding Manappuram Finance Q2 FY27 results. This content is for informational and educational purposes only and does not constitute SEBI-registered investment advice or a recommendation to buy or sell any security.