Muthoot Finance (MUTH)’s 2QFY24 performance was characterized by: 1) muted gold loan growth at ~2% QoQ to ~INR675b, 2) ~80bp QoQ contraction in NIM; and 3) an increase in the cost-to-income ratio to ~30% (vs. ~28% in 2QFY23) primarily owing to lower NII from yield moderation and rise in CoB. Standalone PAT grew ~14% YoY to ~INR9.9b (6% miss). Net total income grew 20% YoY to ~INR19.2b, while PPoP rose 17% YoY (down 4% QoQ) to INR13.4b (6% miss). Gold loan growth was muted but supported by: a) high gold prices allowing an increase in LTV to ~70% (vs. ~68% in 1Q), b) gold tonnage growth of ~1% QoQ and increase in customer base of ~2% QoQ.
OutlookWith limited upside catalysts for the stock, we maintain our Neutral rating with a revised TP of INR1,270 (based on 1.7x Sep’25E P/BV).
For all recommendations report, click hereDisclaimer: 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.
Muthoot Finance - 10 - 11 - 2023 - motiDiscover 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!
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