⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
MUTHOOTFIN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | MUTHOOTFIN | Market Cap | 1,38,019 Cr. | Current Price | 3,439 ₹ | High / Low | 4,150 ₹ |
| Stock P/E | 16.1 | Book Value | 859 ₹ | Dividend Yield | 0.76 % | ROCE | 13.4 % |
| ROE | 19.7 % | Face Value | 10.0 ₹ | DMA 50 | 3,528 ₹ | DMA 200 | 3,228 ₹ |
| Chg in FII Hold | 0.17 % | Chg in DII Hold | -0.24 % | PAT Qtr | 2,656 Cr. | PAT Prev Qtr | 2,345 Cr. |
| RSI | 49.3 | MACD | -79.5 | Volume | 10,44,116 | Avg Vol 1Wk | 12,74,435 |
| Low price | 1,964 ₹ | High price | 4,150 ₹ | PEG Ratio | 1.69 | Debt to equity | 3.69 |
| 52w Index | 67.5 % | Qtr Profit Var | 94.9 % | EPS | 213 ₹ | Industry PE | 17.2 |
📊 Financials
- Revenue & Profitability: PAT rose from ₹2,345 Cr. to ₹2,656 Cr. (+94.9%), showing strong growth momentum. EPS at ₹213 is robust.
- Margins & Returns: ROCE (13.4%) and ROE (19.7%) are decent, though not exceptional compared to peers in financial services.
- Debt: Debt-to-equity ratio of 3.69 indicates heavy reliance on borrowings, typical for NBFCs but adds risk.
- Cash Flow: Strong profitability supports liquidity, but high leverage requires careful monitoring.
💹 Valuation
- P/E Ratio: 16.1 vs Industry PE of 17.2 → Fairly valued compared to peers.
- P/B Ratio: ~4.0 (Price ₹3,439 / Book Value ₹859) → Reasonable for financial services.
- PEG Ratio: 1.69 → Growth moderately justifies valuation.
- Intrinsic Value: Current price appears close to fair value, offering balanced risk-reward.
🏢 Business Model & Competitive Advantage
- Muthoot Finance is India’s largest gold loan NBFC, leveraging trust, brand strength, and extensive branch network.
- Competitive advantage lies in scale, customer loyalty, and niche focus on secured lending.
- Dividend yield of 0.76% is modest, reflecting reinvestment focus.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near ₹3,100–3,250 range (closer to DMA 200 at ₹3,228).
- Long-Term Holding: Suitable for investors seeking exposure to gold-backed lending. Accumulation at lower levels is recommended due to high leverage risks.
✅ Positive
- Strong PAT growth (+94.9%) shows earnings momentum.
- ROE near 20% indicates decent shareholder returns.
- FII holdings increased (+0.17%), showing foreign investor confidence.
⚠️ Limitation
- High debt-to-equity ratio (3.69) increases financial risk.
- Dividend yield is relatively low (0.76%).
- ROCE at 13.4% is modest compared to other financial peers.
📉 Company Negative News
- DII holdings reduced (-0.24%), showing cautious domestic sentiment.
- MACD at -79.5 indicates bearish technical momentum.
📈 Company Positive News
- PAT rose significantly QoQ, reflecting strong operational performance.
- FII holdings increased, signaling global investor confidence.
- EPS at ₹213 highlights strong profitability.
🏭 Industry
- NBFC sector is cyclical, tied to interest rates, liquidity, and gold price movements.
- Industry PE at 17.2 suggests valuations are moderate compared to broader financial services.
🔎 Conclusion
- Muthoot Finance is fundamentally strong with robust earnings, brand strength, and niche dominance in gold loans.
- However, high leverage and modest ROCE limit upside potential.
- Best strategy: Accumulate near ₹3,100–3,250 range for long-term holding, while avoiding aggressive buying at current levels.