In a span of less than three months, Muthoot Finance share price has rallied 129 per cent from Rs 477.50. With today's surge in the stock price, the market capitalisation of Muthoot Finance stands at Rs 43,472.45 crore.
Muthoot Finance share price zoomed 11 per cent to hit a fresh 52-week high at Rs 1,109 on BSE a day after the company reported a 59 per cent on-year increase in its standalone net profit at Rs 815 crore for the January-March quarter of the previous fiscal. In a span of less than three months, Muthoot Finance share price has rallied 129 per cent from Rs 477.50. With today’s surge in the stock price, the market capitalisation of Muthoot Finance stands at Rs 43,472.45 crore. “Post the 2018 IL&FS crisis, availability of unsecured loans has become difficult due to tighter credit standards and ill health of many NBFCs. While this improves competitive positioning of a healthy NBFC like Muthoot Finance, strength in gold prices improves the recall of gold loans,” Antique Stock Broking said in its latest research note.
Muthoot Finance reported a standalone net profit of Rs 3,018 crore in FY20 against Rs 1,972 crore in the previous fiscal, a growth of 53 per cent. “In this tough environment, management is targeting a growth of 15% in its core gold loan book for FY20. Stage III loan assets declined by 34bps QoQ to 2.16%, with NPA never a worry for gold loan,” said Jaikishan Parmar, Senior Equity Research Analyst, Angel Broking Ltd, adding that the recent increase in gold prices also provided comfort on asset quality.
Loan assets registered a 22 per cent on-year growth at Rs 41,611 crore as on March 31, 2020 as against Rs 34,246 crore in the same period last year. During the quarter, gold loan assets increased by Rs 3,113 crore.”Given the sharp increase in gold prices and expected demand surge as businesses slowly resume operations, we have increased our EPS estimates by 8-12 per cent for FY21-22E. However, given the uncertain outlook for Muthoot Finance’s subsidiaries and the re-rating in the stock, we maintain ‘neutral’ rating on the stock,” Motilal Oswal Securities said in the results update.
Around 10.15 AM, Muthoot Finance shares were trading 10.78 per cent at Rs 1,108 apiece, as compared to a 0.28 per cent rise in S&P BSE Sensex.