Stock Tales - Muthoot Finance - ICICI Direct

Muthoot Finance is a leading gold financier in India with gold loan AUM of Rs. 52613 crore as on June 2021.

- It has a large footprint across India with 4625 gold lending branches

- The company also has a presence in other lending segments like housing, microfinance, vehicle finance via its subsidiaries

Rationale

- Large market opportunity to drive long term growth

- Steady business growth ahead backed by low gold penetration and management target to achieve Rs. 1 lakh crore book by FY24-25

- Sublime asset quality with GNPA at ~2% and a recovery rate of above 90%

- Healthy financials with strong margin of 12-14% led by gold loan yielding ~21%

Key triggers for future price performance

- Gradual increase in ticket size, increasing working capital requirement is a key driver for growth

- Lower credit cost leading to healthier RoA, RoE at +5%, +25%, respectively

- Strong asset quality, low leverage, positive ALMs and with sticky customer base levers to aid strong operating performance

Shares of Muthoot Finance Limited was last trading in BSE at Rs. 1543.95 as compared to the previous close of Rs. 1503.05. The total number of shares traded during the day was 122009 in over 8239 trades.

The stock hit an intraday high of Rs. 1589.55 and intraday low of 1505.25. The net turnover during the day was Rs. 189910738.00.

For details, click on the link below: Link to the report

Source : Equity Bulls

Keywords

MuthootFinance INE414G01012 MUTHOOTFIN Finance NBFCs GoldLoan ICICIDirect ICICISecurities