For the quarter, Muthoot’s AUM growth stood at 30.7% from last year to ₹90,197 crore. In an interaction with CNBC-TV18 on Monday, George Alexander Muthoot of Muthoot Finance said that the company’s AUM has now crossed ₹1 lakh crore.
While there were some asset quality pressure when it comes to its unit Belstar MFI, as has been the case with most MFI companies during the quarter, Muthoot said that micro financing has plateaued during the last two quarters and the company is not pursuing growth aggressively in that space.
Muthoot added that he expects to see low to zero growth in the MFI space for “some time”, without elaborating on the timeline.
Muthoot Finance has seen a pick-up in Gold Loans with more regulations coming in for the unsecured lending space. While Gold loan NPAs stood at 4.3%, Muthoot said that all of it is against secured loans.
Brokerage firm Jefferies maintained its “buy” recommendation on the stock with a price target of ₹2,200, which is higher than the recent highs made by Muthoot of ₹2,087.
Jefferies is expecting lower loan losses due to in-money collaterals, despite elevated credit costs for the company.
Gold prices have seen some profit booking from the record high levels, but Jefferies remains constructive on gold prices going forward. Goldman Sachs too has a price target of $3,000 on global Gold prices.
Jefferies is anticipating healthy growth in Muthoot’s Earnings per Share (EPS) and a Return on Equity (RoE) of 19% over financial year 2024 – 2027.
Shares of Muthoot Finance are trading 6.8% higher at ₹1,897.5. The stock is up 30% so far in 2024.
