NSEI:MAGMA

Stock Analysis Report

Executive Summary

Magma Fincorp Limited, a non-banking finance company, provides asset finance services in India.

Snowflake

Fundamentals

Established dividend payer and good value.


Similar Companies

Share Price & News

How has Magma Fincorp's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

13.7%

MAGMA

4.2%

IN Consumer Finance

2.4%

IN Market


1 Year Return

-46.8%

MAGMA

55.9%

IN Consumer Finance

8.0%

IN Market

Return vs Industry: MAGMA underperformed the Indian Consumer Finance industry which returned 55.9% over the past year.

Return vs Market: MAGMA underperformed the Indian Market which returned 8% over the past year.


Shareholder returns

MAGMAIndustryMarket
7 Day13.7%4.2%2.4%
30 Day-13.5%6.3%2.5%
90 Day-32.3%20.6%3.6%
1 Year-46.3%-46.8%57.1%55.9%10.3%8.0%
3 Year-53.8%-54.7%85.5%81.4%22.3%16.0%
5 Year-53.7%-55.4%269.8%252.6%42.8%29.3%

Price Volatility Vs. Market

How volatile is Magma Fincorp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Magma Fincorp undervalued compared to its fair value and its price relative to the market?

5.71x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MAGMA (₹52.35) is trading above our estimate of fair value (₹23.89)

Significantly Below Fair Value: MAGMA is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MAGMA is good value based on its PE Ratio (5.7x) compared to the Consumer Finance industry average (13.7x).

PE vs Market: MAGMA is good value based on its PE Ratio (5.7x) compared to the Indian market (13x).


Price to Earnings Growth Ratio

PEG Ratio: MAGMA is good value based on its PEG Ratio (0.2x)


Price to Book Ratio

PB vs Industry: MAGMA is good value based on its PB Ratio (0.5x) compared to the IN Consumer Finance industry average (0.6x).


Next Steps

Future Growth

How is Magma Fincorp forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

26.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MAGMA's forecast earnings growth (26% per year) is above the savings rate (7.6%).

Earnings vs Market: MAGMA's earnings (26% per year) are forecast to grow faster than the Indian market (18.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MAGMA's revenue (9.1% per year) is forecast to grow slower than the Indian market (11.3% per year).

High Growth Revenue: MAGMA's revenue (9.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MAGMA's Return on Equity is forecast to be low in 3 years time (11%).


Next Steps

Past Performance

How has Magma Fincorp performed over the past 5 years?

9.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: MAGMA's earnings have grown by 9.9% per year over the past 5 years.

Accelerating Growth: MAGMA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MAGMA had negative earnings growth (-4.9%) over the past year, making it difficult to compare to the Consumer Finance industry average (14.4%).


Return on Equity

High ROE: MAGMA's Return on Equity (9%) is considered low.


Return on Assets

ROA vs Industry: MAGMA's Return on Assets is below or equal to the Consumer Finance industry average last year.


Return on Capital Employed

ROCE Improving: Insufficient data to calculate MAGMA's Return on Capital Employed to determine if it has improved over the past 3 years.


Next Steps

Financial Health

How is Magma Fincorp's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: MAGMA has a low level of unsold assets or inventory.

Debt Coverage by Assets: MAGMA's debt is covered by short term assets (assets are 1.182300x debt).


Financial Institutions Analysis

Asset Level: MAGMA's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if MAGMA has a sufficient allowance for bad loans.

Low Risk Liabilities: MAGMA reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if MAGMA has an acceptable proportion of non-loan assets held.

Low Risk Deposits: MAGMA has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if MAGMA has an appropriate level of bad loans.


Next Steps

Dividend

What is Magma Fincorp's current dividend yield, its reliability and sustainability?

1.53%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%0.6%markettop25%2.4%industryaverage0.5%forecastin3Years1.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: MAGMA's dividend (1.53%) is higher than the bottom 25% of dividend payers in the Indian market (0.6%).

High Dividend: MAGMA's dividend (1.53%) is low compared to the top 25% of dividend payers in the Indian market (2.41%).

Stable Dividend: MAGMA's dividends per share have been stable in the past 10 years.

Growing Dividend: MAGMA's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (8.7%), MAGMA's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MAGMA's dividends in 3 years are forecast to be thoroughly covered by earnings (6.2% payout ratio).


Next Steps

Management

What is the CEO of Magma Fincorp's salary, the management and board of directors tenure and is there insider trading?

3.0yrs

Average management tenure


CEO

Sanjay Chamria (55yo)

12.5yrs

Tenure

₹49,440,000

Compensation

Mr. Sanjay Chamria serves as Non-Executive Chairman at Magma Housing Finance Ltd. Mr. Chamria is a Promoter of Magma FinCorp. Limited (also known as Magma Leasing Limited) and has been its Managing Directo ...


CEO Compensation Analysis

Compensation vs. Market: Sanjay's total compensation ($USD698.15K) is about average for companies of similar size in the Indian market ($USD278.03K).

Compensation vs Earnings: Sanjay's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.0yrs

Average Tenure

49yo

Average Age

Experienced Management: MAGMA's management team is considered experienced (3 years average tenure).


Board Age and Tenure

3.2yrs

Average Tenure

64yo

Average Age

Experienced Board: MAGMA's board of directors are considered experienced (3.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Kamal Kailash Baheti (56yo)

    President & Group CFO

    • Tenure: 0yrs
    • Compensation: ₹22.16m
  • Mayank Poddar (66yo)

    Chairman Emeritus & Whole time Director

    • Tenure: 3.2yrs
    • Compensation: ₹16.84m
  • Sanjay Chamria (55yo)

    Vice Chairman & MD

    • Tenure: 12.5yrs
    • Compensation: ₹49.44m
  • Kaushik Banerjee (56yo)

    Adviser of Asset Finance

    • Tenure: 0yrs
  • Shabnum Zaman

    Compliance Officer & Company Secretary

    • Tenure: 4.2yrs
    • Compensation: ₹2.70m
  • Mahender Bagrodia (49yo)

    Chief Credit Officer of Asset Backed Finance

    • Tenure: 0yrs
  • Deepak Patkar (46yo)

    Chief Risk Officer

    • Tenure: 1.8yrs
  • Sanjiv Jha (49yo)

    National Business Head- ABF

    • Tenure: 0yrs
  • Rajneesh Mishra (46yo)

    Chief People Officer

    • Tenure: 0.8yrs
  • Akshay Dhanak (42yo)

    Head of Information Technology

    • Tenure: 0yrs

Board Members

  • Mayank Poddar (66yo)

    Chairman Emeritus & Whole time Director

    • Tenure: 3.2yrs
    • Compensation: ₹16.84m
  • Sanjay Chamria (55yo)

    Vice Chairman & MD

    • Tenure: 12.5yrs
    • Compensation: ₹49.44m
  • Narayan Seshadri (62yo)

    Non Executive Independent Chairman

    • Tenure: 3.8yrs
    • Compensation: ₹8.51m
  • Vegulaparanan Viswanathan (68yo)

    Non Executive Independent Director

    • Tenure: 3.2yrs
    • Compensation: ₹6.60m
  • Vijayalakshmi Iyer (64yo)

    Non-Executive Independent Director

    • Tenure: 0.8yrs

Company Information

Magma Fincorp Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Magma Fincorp Limited
  • Ticker: MAGMA
  • Exchange: NSEI
  • Founded: 1978
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: ₹14.357b
  • Shares outstanding: 269.36m
  • Website: https://www.magma.co.in

Number of Employees


Location

  • Magma Fincorp Limited
  • Equinox Business Park
  • 2nd Floor, Tower 3
  • Mumbai
  • Maharashtra
  • 400 070
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
524000BSE (Mumbai Stock Exchange)YesEquity SharesININRApr 2004
MAGMANSEI (National Stock Exchange of India)YesEquity SharesININRApr 2004

Biography

Magma Fincorp Limited, a non-banking finance company, provides asset finance services in India. The company offers loans for cars, SMEs, construction equipment, commercial vehicles, tractors, and used vehi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 12:46
End of Day Share Price2019/10/23 00:00
Earnings2019/06/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.