Muthoot Finance shares witnessed a robust rally of 4.3 per cent to reach Rs 1,745 apiece on the BSE during Friday’s intraday trade, inching closer to their all-time high level. This surge follows the gold financier’s impressive earnings report for the March quarter of fiscal year 2023-24 (FY24).
By 9:41 AM, the shares had slightly receded from their peak, trading 1.13 per cent higher at Rs 1,692 per share, compared to the 0.73 per cent gain in the benchmark S&P BSE Sensex. The stock had previously hit a record high of Rs 1,762 per share on May 28, 2024.
Muthoot Finance reported a notable 17 per cent year-on-year (Y-o-Y) increase in net profit for the March quarter, reaching Rs 1,056.3 crore, compared to Rs 902.6 crore in the corresponding period last year. Additionally, its net interest income (NII) surged by around 15 per cent year-on-year to Rs 2,134.8 crore, while consolidated loan assets under management saw an 8 per cent increase during the quarter.
For the entire fiscal year, Muthoot Finance achieved its highest-ever consolidated loan asset under management (AUM) of Rs 89,079 crore, marking a 25 per cent Y-o-Y increase, and its highest-ever standalone Loan AUM of Rs 75,827 crore, reflecting a 20 per cent Y-o-Y rise.
Profit after tax (PAT) also reached record levels, standing at Rs 4,468 crore (consolidated; up 22 per cent Y-o-Y) and Rs 4,050 crore (standalone; up 17 per cent Y-o-Y). Moreover, Muthoot Finance reported its highest-ever gross Gold loan advance in any year at Rs 165,746 crore, with the highest-ever Gold loan advance to new customers at Rs 16,415 crore.
The company also witnessed an 18-per cent increase in Gold Loan AUM at Rs 11,003 crore.
Analysts at Kotak Institutional Equities anticipate Muthoot Finance to achieve an 18 per cent earnings CAGR during FY2025-27E, driven by a 16 per cent loan book CAGR and margin expansion over the medium term. They have assigned an ‘Add’ rating with a higher target price of Rs 1,850.
Looking forward, Muthoot Finance management has maintained its guidance of 15–16 per cent gold AUM growth in FY25E. Moreover, segments like microfinance (MFI), personal loans (PL), and HL segments are expected to witness increased traction, while vehicle financing (VF) segment growth could remain subdued.
However, despite the positive outlook, Nuvama Institutional Equities has retained its ‘Reduce’ call on Muthoot Finance due to the stock’s sharp rally since Q3FY24 earnings, driven by regulatory actions on competitors and a significant increase in gold prices.
