Are Manappuram Fin. latest results good or bad?

The latest financial results for Manappuram Finance indicate a challenging operational environment. For the second quarter of FY26, the company reported net sales of ₹2,262.39 crores, reflecting a year-on-year contraction of 9.08% and a sequential decline of 2.76%. This decline in sales is accompanied by a significant drop in net profit, which fell to ₹138.38 crores, representing a 75.05% decrease compared to the same quarter last year.
Profitability metrics have also shown considerable compression, with the PAT margin decreasing sharply to 5.86% from 22.37% a year prior. This marks one of the weakest margin performances in recent years, highlighting operational challenges that the company is currently facing. The operating profit margin before depreciation, interest, and tax stood at 45.48%, down from 65.98% in the same quarter last year, indicating a deterioration in cost management and operational efficiency.

The company's return on equity has also declined to 9.78%, significantly below its five-year average of 16.74%, raising concerns about capital efficiency. Additionally, the interest expenses remain elevated at ₹855.28 crores, which further pressures profitability.

Despite these challenges, the company has seen some stability in its shareholding structure, with foreign institutional investors gradually increasing their stake, suggesting a degree of confidence in the long-term potential of the business. However, the overall financial trend is classified as negative, reflecting the sharp profit decline and margin compression observed in recent quarters.

Overall, Manappuram Finance's latest results underscore a critical juncture for the company, as it navigates through operational pressures while maintaining a focus on stabilizing margins and returning to profitable growth. The company has experienced an adjustment in its evaluation, reflecting these recent financial challenges.