MUTHOOTFIN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | MUTHOOTFIN | Market Cap | 1,32,394 Cr. | Current Price | 3,297 ₹ | High / Low | 4,150 ₹ |
| Stock P/E | 13.1 | Book Value | 940 ₹ | Dividend Yield | 0.91 % | ROCE | 16.0 % |
| ROE | 30.6 % | Face Value | 10.0 ₹ | DMA 50 | 3,439 ₹ | DMA 200 | 3,292 ₹ |
| Chg in FII Hold | 0.56 % | Chg in DII Hold | -0.70 % | PAT Qtr | 3,086 Cr. | PAT Prev Qtr | 2,656 Cr. |
| RSI | 42.3 | MACD | -43.6 | Volume | 3,74,954 | Avg Vol 1Wk | 7,48,172 |
| Low price | 2,058 ₹ | High price | 4,150 ₹ | PEG Ratio | 0.30 | Debt to equity | 3.67 |
| 52w Index | 59.2 % | Qtr Profit Var | 105 % | EPS | 252 ₹ | Industry PE | 18.7 |
📊 Financials: The company shows strong profitability with ROE at 30.6% and ROCE at 16.0%. Debt-to-equity is high at 3.67, reflecting leveraged operations typical of NBFCs. Quarterly PAT rose sharply from ₹2,656 Cr. to ₹3,086 Cr., a 105% variation, indicating strong earnings momentum. EPS of ₹252 supports robust cash flow generation.
💹 Valuation: Current P/E of 13.1 is below the industry average of 18.7, suggesting undervaluation. The PEG ratio of 0.30 highlights attractive growth prospects relative to price. Book value of ₹940 against a market price of ₹3,297 implies a reasonable P/B ratio compared to peers. Intrinsic value appears supportive of current levels, with potential upside.
🏭 Business Model: The company operates in gold loan financing, benefiting from strong brand recognition, wide branch network, and consistent demand for secured lending. Competitive advantage lies in its scale, trust factor, and ability to generate high returns despite leverage.
📈 Entry Zone: A favorable entry would be closer to ₹3,100–3,200, near the 200 DMA of ₹3,292. Current price of ₹3,297 is near fair value, making gradual accumulation attractive.
⏳ Long-Term Holding: Strong fundamentals, consistent profitability, and undervaluation relative to industry peers support long-term holding. Investors can accumulate steadily, with potential for strong returns as demand for gold-backed loans remains resilient.
Positive
- ✅ Strong ROE (30.6%) and EPS (₹252)
- ✅ PAT growth of 105% quarter-on-quarter
- ✅ P/E (13.1) below industry average, suggesting undervaluation
- ✅ Dividend yield of 0.91% adds shareholder value
Limitation
- ⚠️ High debt-to-equity ratio (3.67) increases financial risk
- ⚠️ ROCE (16.0%) is modest compared to ROE
- ⚠️ RSI at 42.3 indicates weak momentum
Company Negative News
- 📉 Decline in DII holding (-0.70%) shows reduced domestic institutional confidence
Company Positive News
- 📈 Increase in FII holding (+0.56%) reflects foreign investor interest
- 📈 Strong quarterly PAT growth supports earnings outlook
Industry
- 💰 NBFC sector benefits from strong demand for secured lending
- 📊 Industry P/E at 18.7 suggests peers are valued higher
- 🌍 Gold loan demand remains resilient in uncertain economic conditions
Conclusion
Overall, the company is financially strong with excellent ROE, robust earnings growth, and undervaluation compared to peers. High leverage is a limitation, but the business model supports resilience. Best strategy is gradual accumulation near ₹3,100–3,200 for long-term holding, with potential for strong returns as gold loan demand continues.
Would you like me to extend this with a peer comparison against other NBFCs, or a technical analysis view to highlight support/resistance and momentum indicators?