Manappuram Finance has released its Q3 FY25 results, and while there are some positive takeaways, the company is also grappling with significant challenges. The gold loan business continues to shine, but the microfinance segment has dragged overall profitability. Investors are left wondering: is this a buying opportunity or a warning sign?
Q3 FY25 financial highlights
Manappuram Finance’s financial performance for the quarter ended December 2024 presents a mixed bag. Here’s a breakdown of the key numbers:
| Metric | Q3 FY25 | Q3 FY24 | YoY Change |
| Standalone Net Profit | ₹453.4 crore | ₹428.6 crore | +5.8% |
| Consolidated Net Profit | ₹278.46 crore | ₹575.31 crore | -51.6% |
| Net Interest Income (NII) | ₹1,160.9 crore | ₹1,021.2 crore | +13.7% |
| Total Revenue | ₹2,516.27 crore | ₹2,214.2 crore | +13.6% |
| Microfinance Revenue | ₹665.46 crore | ₹707.97 crore | -6% |
| Gold Loan Revenue | ₹1,897.17 crore | ₹1,618.71 crore | +17.2% |
| Microfinance Bad Loans | ₹473 crore | ₹118 crore | +300% |
| Total Provisions | ₹555 crore | Not disclosed | – |
| Interim Dividend | ₹1 per share | – | – |
Gold loan business shines, but microfinance struggles
Gold loans, which make up 75% of Manappuram Finance’s total revenue, grew 17% YoY. This is largely due to record-high gold prices, allowing customers to borrow more against their holdings. However, while this segment remains strong, the company’s microfinance unit—Asirvad Microfinance—has been a major concern.
At the start of Q3, the Reserve Bank of India (RBI) placed a ban on loan disbursements from the microfinance division due to high pricing and mark-ups over funding costs. Though the restriction was lifted in December, the damage was done. The microfinance unit’s bad loans and provisions surged four-fold to ₹473 crore, making up a major chunk of the company’s total provisions of ₹555 crore. This resulted in a revenue decline of 6% in the microfinance business.
Also read: Lupin robust Q3 results: Key takeaways
Market reaction and brokerage views
Manappuram Finance’s stock saw sharp movements following the Q3 announcement. Here’s how the market responded:
- The stock opened at ₹187.10 on the BSE, over 3% lower than the previous close of ₹194.25.
- It hit an intraday low of ₹169.10, a drop of more than 10%.
- The stock eventually closed at ₹180.53, down nearly 7%.
What are analysts saying?
Brokerages have given mixed views on the stock. While the gold loan business remains robust, concerns about the microfinance portfolio persist.
| Brokerage | Target Price | Rating | Key Takeaways |
| Motilal Oswal | ₹215 | Neutral | Flat gold loan growth, weak MFI performance |
| Jefferies | ₹205 | Hold | MFI stress will drag near-term earnings |
| CLSA | ₹225 | Accumulate | Valuations reasonable, but recovery in MFI needed |
Fundraising plans: Strengthening future growth
Manappuram Finance has announced plans to raise up to $2 billion through its Global Medium-Term Note (GMTN) program. This move aims to enhance funding flexibility and support future expansion, especially given the challenges in the microfinance business. External commercial borrowings (ECBs) could help the company navigate current financial pressures while keeping its capital structure intact.
You may also read: IRCTC Q3 Results 2025: Key Financial Highlight
Should investors worry or stay optimistic?
Positives:
- Strong gold loan business with 17% revenue growth.
- Net interest income up 13.7% YoY.
- Interim dividend of ₹1 per share declared.
- ₹2 billion fundraising plan for future growth.
Concerns:
- Consolidated net profit fell 52% YoY
- Microfinance bad loans surged four-fold
- Market reaction has been negative, with stock falling nearly 7%
- Broking firms maintain cautious outlook due to MFI stress
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Final thoughts
Manappuram Finance’s Q3 FY25 results highlight two contrasting narratives: a resilient gold loan business that continues to benefit from rising gold prices and a struggling microfinance segment that is dragging overall profitability. While long-term investors may see value given the company’s solid gold loan franchise, near-term headwinds remain due to asset quality concerns in microfinance.
For investors, the decision boils down to risk appetite. If you believe the gold loan business will continue driving growth and the microfinance woes are temporary, holding onto the stock might be a reasonable choice. However, if the MFI segment’s stress persists, downside risks could continue in the short term.
