MUTHOOTFIN - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.0

🏦 Fundamental Analysis: Muthoot Finance Ltd. (MUTHOOTFIN)

Muthoot Finance is India’s largest gold loan NBFC, with a strong brand, consistent profitability, and a robust lending model. Its fundamentals support long-term investment, though high leverage and moderate ROCE warrant some caution.

Metric Value Implication

Market Cap ₹1,05,215 Cr. Large-cap; dominant player in gold-backed lending

Stock P/E 19.7 Undervalued vs. industry PE of 25.2 — attractive entry

PEG Ratio 1.99 Fair — valuation aligns with growth expectations

ROE / ROCE 19.6% / 13.1% Strong ROE; ROCE slightly below ideal for NBFCs

Dividend Yield 0.99% Decent — adds to long-term returns

Debt-to-Equity 3.38 High — typical for NBFCs, but needs monitoring

EPS ₹133 Strong earnings base

Profit Growth (QoQ) +26.8% Robust — consistent performance

📉 Technical & Trend Analysis

Current Price: ₹2,617

DMA 50 / DMA 200: ₹2,537 / ₹2,245 — bullish trend, trading above both

RSI: 50.1 — neutral zone

MACD: +32.0 — bullish momentum

Volume: Slightly above average — steady investor interest

✅ Is It a Good Long-Term Investment?

Yes. Muthoot Finance combines strong ROE, consistent earnings, and a reasonable valuation. Its gold loan model is resilient during economic cycles, and the PEG ratio suggests fair pricing. The high debt-to-equity is typical for NBFCs but should be watched.

🎯 Ideal Entry Price Zone

Buy Zone: ₹2,400–₹2,500

Near 50 DMA and previous support levels

Accumulate gradually if PEG stays below 2.0 and ROE remains above 18%

Entry ideal during broader NBFC sector corrections

🧭 Exit Strategy / Holding Period (If Already Holding)

If you're already invested

Holding Period: 3–5 years — to benefit from compounding and gold loan demand

Exit Strategy

Partial Exit near ₹2,700–₹2,750 if valuation stretches (P/E > 22)

Hold if ROE stays above 18% and PAT growth continues

Reassess if debt-to-equity rises above 4 or gold prices fall sharply

Would you like a comparison with peers like Manappuram Finance or IIFL Finance to explore broader NBFC opportunities?

Edit in a page