Muthoot Finance Shares Surge Over Profit Growth

Muthoot Finance shares rose over 8% today, November 18, hitting an intraday high of Rs.1924.05. Around 9:28 AM, the stock was trading at Rs.1,855.3, up 4.37%, even as the BSE Sensex dipped 0.20% to 77,453.86. The company’s market capitalization stood at Rs.74,810.79 crore. Over the past year, the stock has gained 43.95%, outperforming Sensex’s 18% rise.

Q2FY25 Financials

Muthoot Finance posted a 21% YoY increase in consolidated net profit, reaching Rs.1,321 crore compared to Rs.1,095 crore in Q2FY24. Total revenue from operations surged 36.6% YoY to Rs.4,928.82 crore, up from Rs.3,606.13 crore. On a standalone basis, the company’s net profit rose 26.25% to Rs.1,251.14 crore, while total income climbed 34.57% to Rs.4,117.44 crore.

Loan Portfolio Growth

Loan assets under management (AUM) grew 31% YoY to Rs.1.04 trillion, with the gold loan portfolio contributing Rs.86,164 crore, showing a 28% YoY growth. The company also achieved record gold loan disbursements to new customers during H1FY25, amounting to Rs.10,687 crore for 9.66 lakh customers.

Equity Infusion & Strategy

The board approved an additional equity infusion of Rs.500 crore into its wholly-owned subsidiary, Muthoot Money, to pump up its capital base and boost its capital adequacy ratio. While the primary focus remains gold loans, the company showed progress in its microfinance, personal loan, and home loan segments.

Market Outlook

Brokerages have mixed views. While some brokerages maintained a neutral stance with a target price of Rs.1,815, other foreign brokerages upgraded the stock to ‘Equal-weight’ from ‘Underweight’ with a revised target of Rs.1,600.

Conclusion: Muthoot Finance is positioned as India’s known gold loan NBFC, backed by good financial performance and diversification. With its AUM and profits reaching historic highs, the company appears well-positioned to capitalize on opportunities, despite brokerages signaling limited near-term upside for the stock.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.