Manappuram Finance Ltd., the gold financing company, has received multiple downgrades and price target cuts from brokerages after the Reserve Bank of India asked its subsidiary Asirvad Micro Finance to stop sanctions and disbursals of loans.
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Brokerage firm CLSA has maintained its "outperform" rating on the stock but cut its price target to ₹200 from ₹240 earlier.
CLSA wrote in its note that Asirvad forms 25% of Manappuram's overall Assets Under Management (AUM) and that it has cut Asirvad's profitability estimates and its target multiple in Manappuram's valuation multiple.
Morgan Stanley has downgraded Manappuram to "Equalweight" from its earlier rating of "Overweight" and also cut its price target to ₹170. It said that the recent RBI embargo could materially hurt profits and for a longer period of time.
The brokerage has cut Manappuram's consolidated earnings forecast by 20% for financial year 2025 and by 30% across financial year 2026 and 2027.