Muthoot Capital Services

Why has the group been silent?

The Muthoot capital has seen quite a value destruction and despite all the tailwinds, and good promoters they are not able to make it a solid franchisee.

I was going through the annual report and I have two questions:

  1. Why has the business in FY21-22 reduced to 397 crore from 504 crores when the Auto sector has started bouncing back.
  2. While their interest expense is down to 150 crore yet there expenses have increased from 186 crore to 476 crore
  3. What is this other expense which has increased by 102%. Is it a one-time thing or what’s happening over here?

Let’s discuss this stock and see if it’s a value trap or a great opportunity to be tapped.

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