Manappuram Finance is underperforming the market: Why it is stock pick of the week

Manappuram Finance, the second largest gold loan lender, is underperforming the market for various reasons. Lacklustre numbers for the fourth quarter of 2020-21 is the first reason. For instance, its gold loan AUM fell by 6% q-o-q. Gold loan defaults have correlation to prevailing gold prices—defaults will be lower when gold prices go up and will be higher when gold prices come down. With 12% q-o-q decline and 21% decline from peak levels