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What ails Muthoot Finance despite stability in gold prices?

The current valuation of Muthoot Finance factors in the near-term challenges. In a highly volatile market, only long-term investors could slowly add the stock should it correct on market gyrations

May 30, 2022 / 09:25 AM IST
What ails Muthoot Finance despite stability in gold prices?

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PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Muthoot Finance (CMP: Rs 1,096 Market Cap: Rs 43,993 crore) has corrected 34 percent in the past six months against a 9 percent drop in the Nifty despite an apparent stability in gold prices. What ails the dominant gold-financing NBFC in the country is the hyper competition in the gold loan financing market and the squeeze on margin, along with a lacklustre demand that apparently made the situation worse. Can its fortune change in the coming quarters? Or has...

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