MOSL: MUTHOOT FINANCE (Downgrade to Neutral)-Growth remains elusive-quarter driven by one-offs
​Muthoot Finance: Growth remains elusive; quarter driven by one-offs
(MUTH IN, Mkt Cap USD2.9b, CMP INR490, TP INR550, 12% Upside, Downgrade to Neutral)
- 2QFY18 PAT grew 53% YoY (+29% QoQ) to INR4.5b (15% beat). Although revenue came in 31% above estimate, it was largely offset by higher-than-expected provisioning.
- AUM was flat at INR276b. We note that AUM in east grew 15%/13% YoY/QoQ to INR22.1b, while that in west, north and south remained stagnant sequentially.
- NII grew 52%/36% YoY/QoQ to INR11.5b, largely led by 440bp QoQ expansion in NIM (calculated) to 17%. This was driven by a 380bp QoQ rise in calculated yields to 24% and a 100bp decline in cost of funds to 8.8%. The company witnessed strong penal interest collections from overdue accounts, which resulted in a sharp spike in yields.
- Branch rationalization and lower employee count led to a 900bp sequential decline in CIR to 26.4%. Note that this is the second consecutive quarter of reduction in employee count.
Muthoot Finance Limited is a gold financing company. The Company is a non-banking financial company (NBFC), which is engaged in providing loan (financing) against collateral of gold jewelry. The Company operates through two segments: Financing and Power Generation. The Company provides personal and business loans (secured by gold jewelry) primarily to individuals having no access to formal credit for a reasonable tenure to meet their short-term working capital requirements. The Company offers gold loans, foreign inward money transfer services, foreign exchange services, insurance broking, home loans, personal loans, collection services, microfinance, wind mill power generation, white label automated teller machine, instant money transfer services and domestic money transfer services. The Company has a network of approximately 4,294 branches all over India. In Sri Lanka, the Company offers corporate loans, mortgage loans, factoring, business loan and short term loans, among others.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.