Buy Muthoot Finance; target of Rs 550: Motilal Oswal
Motilal Oswal is bullish on Muthoot Finance has recommended buy rating on the stock with a target price of Rs 550 in its research report dated 9 August 2017.
August 14, 2017 / 04:38 PM IST
Motilal Oswal's research report on Muthoot Finance
Muthoot Finance’s (MUTH) 1QFY18 PAT grew 30% YoY (and 9% QoQ) to INR3.51b (in -line). Though there was a 5% revenue miss, it was offset by lower -than -expected provisioning. AUM growth remained anemic at 8% YoY (2% QoQ) to INR278b. The management has guided ~10% AUM growth in gold loans for the year, with potential upside, given the improvement in overall environment. However, the management targets 10% share of AUM from the non- gold loan book by end- FY18 and 15% share by FY19.
We downgrade our FY18/19 EPS estimates by 6 -7% to factor in lower growth. BUY with a TP of INR 550 (2.4x FY19E BV).
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