Muthoot Finance can give 22-25% returns: Aashish Tater

Aashish Tater of fortunewizard.com told CNBC-TV18, "Our study on NBFCs, when we used to recommend Can Fin Homes or Manappuram Finance, the entire gamut, they tend to be multi-baggers in three years to four years time frame. So, if you have a gamut or portfolio of NBFCs, two of these stocks will double every three to four years.""The reason why picked Muthoot Finance is for one simple reason, they are expanding from one geography to another geography. In fact, if you go through their presentation this time, they expanding and foraying into North-Eastern states, one in West Bengal, and their assets under management (AUM) will go from Rs 1,000 crore to Rs 2,000 crore in the next three years. That is a 23 percent compounded annual growth rate (CAGR)which is what we feel," he said."What will happen is the bottomline will triple when there is a jump of two times. So, that will be a huge rerating in terms of expansion because right now it is viewed as a small company, a good group. We think of a very attractive dividend yield. We think this is one stock that should be looked from a year-on-year perspective for CAGR returns. It will not be a multi-bagger, but it will be giving you 22-25 percent returns Y-o-Y because the company itself is growing and it is very conservative."He further added, "The way they are managing their loan portfolio, and now, their interest cost is also reducing, we feel given all these parameters that we have gone through and studied and recommended on old stocks in the same space, they have turned out to be multi-baggers. Some have even surprised us. Something like Bajaj Finance. I never thought that it will be a Rs 7,000 stock. But this is exactly ingredient for growth and NBFC is one space where we feel this is one stock that can be a good CAGR story over years to come."