Prabhudas Lilladher's research report on Muthoot Finance
In Q4 Muthoot Finance (MUTH) reported NIM expansion of ~40bps QoQ to 12.3%, as yields seem to have bottomed out (18.48% vs 18.22% in Q3FY23). PAT at Rs 9.0bn (up .1%QoQ and down 6.0% YoY) came below our estimates of Rs 9.3bn, on account of higher opex and provisions. Asset quality deterioration came as a negative surprise, because Stage-3 assets rose sharply to 3.79% vs 2.58% in Q3FY23 as an accommodation was given to customers for few more months on back of high collateral value. Gold AUM, on the other hand, will continue to see 15% YoY growth in FY24 and FY25, as MUTH managed to post its highest ever quarterly gold disbursement of Rs518.50bn.
Outlook
Given strong gold AUM growth of 8.9% QoQ amidst heavy competition from banks and new age fintech players we maintain our ‘BUY’ rating and TP at Rs 1,315 on (2.2x Sep’24E PABV). Re-rating can happen if company sustains this growth momentum and shows improvement in asset quality.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
