Shares of Manapurram Finance have soared 21 per cent since September 10 backed by robust jump in volumes. India Infoline expects a further 40 per cent upside on the counter given its target price of Rs 35.

The domestic brokerage has re-initiated coverage on the stock with ‘buy’ rating as valuation of 0.7 times price to FY17 book value factors in the risk of falling gold prices.

The domestic brokerage pointed out that the stock price does not reflect the initiatives taken by the company to de-risk its business, improved corporate governance and scope of increasing its return ratios.

“The company introduced lower tenure products and conservative loan to value on 12‐month loan. The various efforts taken towards branch activation have resulted in steady volume growth. Equally credible has been business diversification into micro finance, mortgages and CV loans and improvement in corporate governance,” it said.

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