₹199 - That's What Analysts Think Manappuram Finance Limited (NSE:MANAPPURAM) Is Worth After These Results

Investors in Manappuram Finance Limited (NSE:MANAPPURAM) had a good week, as its shares rose 2.3% to close at ₹164 following the release of its quarterly results. Results overall were respectable, with statutory earnings of ₹17.49 per share roughly in line with what the analysts had forecast. Revenues of ₹11b came in 3.9% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Manappuram Finance

Following the latest results, Manappuram Finance's nine analysts are now forecasting revenues of ₹46.2b in 2022. This would be a notable 13% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 21% to ₹23.05. Before this earnings report, the analysts had been forecasting revenues of ₹45.1b and earnings per share (EPS) of ₹22.40 in 2022. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.2% to ₹199per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Manappuram Finance at ₹231 per share, while the most bearish prices it at ₹189. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Manappuram Finance is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Manappuram Finance's revenue growth will slow down substantially, with revenues next year expected to grow 13%, compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 20% per year. Factoring in the forecast slowdown in growth, it seems obvious that Manappuram Finance is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Manappuram Finance's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Manappuram Finance. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Manappuram Finance going out to 2023, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Manappuram Finance (including 1 which is a bit unpleasant) .

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