Muthoot Finance gains 7% as Q2 profit increases 21%, revenue up 37%

Muthoot Finance shares rose 6.8 per cent in Monday's (November 18) trading session and registered an intraday high of Rs 1,899 per share on BSE. The buying interest in the stock can be attributed to the company posting healthy Q2FY25 results.

 

Around 9:28 AM, Muthoot Finance shares were up 4.37 per cent at Rs 1855.3 per share on BSE. In comparison, the BSE Sensex was down 0.20 per cent at 77,453.86. The market capitalisation of the company stood at Rs 74,810.79 crore. The 52-week high of the stock was at Rs 2,077.45 per share on BSE and 52-week low of the stock was at Rs 1,262.25 per share.

 

In the September quarter, the company reported a 21 per cent year-on-year (Y-o-Y) growth in the consolidated net profit to Rs 1,321 crore, compared to Rs 1,095 crore in Q2 FY24.

 

The total revenue from operation stood at Rs 4,928.82 crore as compared to Rs 3,606.13 crore a year ago which implies an increase of 36.6 per cent. 

 

Impairment on financial instruments grew sharply to Rs 420 crore in Q2 FY25 from Rs 81.14 crore in Q2 FY24.

 

The company’s consolidated loan assets under management (AUM) grew 31 per cent Y-o-Y to Rs 1.04 trillion in September 2024, compared to Rs 79,493 crore a year ago. Of this, the gold loan portfolio expanded by 28 per cent Y-o-Y to Rs 86,164 crore.

 

The company's board also approved an additional equity infusion of Rs 500 crore in Muthoot Money. 

 

The infusion is in order to strengthen the capital base and improve the capital adequacy ratio.  Motilal Oswal has given a 'Neutral' rating on Muthoot Finance stock with arevised target price fo Rs 1,815 per share.   The brokerage believes the positives are already factored in its valuations of 2.2x FY26E P/BV, and anticipates limited upside catalysts for the stock.  

 

Muthoot Money Limited is a wholly owned subsidiary and hence additional equity infusion does not result in a change in shareholding.

 

Muthoot Finance is a non-banking financial company (NBFC), widely recognised for its gold loan business. Founded in 1887, the company provides a range of financial services, including gold loans, personal loans, insurance, and money transfer services. The primary offering of Muthoot Finance is gold loans, where individuals can pledge gold jewellery to secure quick, short-term loans. The company has an extensive network of over 5,000 branches across India, catering to both urban and rural markets. Besides gold loans, it also offers microfinance, helping underserved communities access financial resources. 

 

In the past one year, Muthoot Finance shares have gained 33 per cent against Sensex's rise of 18 per cent.