Muthoot Finance

Stock Opportunities
294

Completely agree with Sidharth.

I’ve talked to so many loan officers at multiple banks and the confusion who will win the gold war (whether the banks will withdraw to pre covid times) is more than ever.

Small Finance Banks have clearly discussed that they will be pursuing GL (read Ujjivan Small Finance Earnings call for this quarter for reference). But at the same time, reading Q4FY23 call of Ujjivan, you can figure out how confident Mr. Davis (smart guy) is about GL for FY24. So that kind of becomes a positive for Muthoot as well if the market itself looks so rosy.

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295

Concall Notes - Aug 2023

Summary:

Financial Performance:

  • Muthoot Finance reported a strong performance in Q1 FY '24 with a 21% YoY increase in consolidated loan assets to 76,799 crores.
  • Highest ever quarterly gold loan disbursement of 53,600 crores and all-time high gold loan portfolio growth of 4,164 crores.
  • Consolidated PAT increased by 27% YoY to 1,045 crores, while standalone profit after tax increased by 22% YoY to 975 crores.

Expansion and Branch Openings:

  • The company opened 59 new branches in the quarter and received permission to open 140 new branches from the RBI.

Subsidiary Performance:

  • Muthoot Home Finance saw a gross AUM of 1,501 crores and disbursed 109 crores in the quarter.
  • Belstar Microfinance witnessed improvement in disbursement and saw gross loan assets cross the 7,000 mark.
  • Muthoot Finance’s subsidiary, Muthoot Insurance Brokers, generated a total premium of 148 crores.
  • The Sri Lankan subsidiary, Asia Asset Finance PLC, saw its loan portfolio grow to 2,010 Sri Lankan rupees and reported a profit after tax of 6 crores.

Interest Rates and Borrowing Costs:

  • Muthoot Finance expects to maintain its net interest margin and spread and will increase lending rates if borrowing costs continue to rise.

Customer Support and Growth Strategy:

  • The company is focused on maintaining a customer-friendly approach and providing support to customers facing financial difficulties.
  • Muthoot Finance aims to maintain its active customer base and continue its growth in the microfinance and two-wheeler financing segments.

Liquidity and Fundraising:

  • The company is comfortable with its current liquidity levels and will continue to raise funds as needed.
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296

https://www.bseindia.com/xml-data/corpfiling/AttachLive/d5fb14ae-809b-42b1-994b-fb84a6062332.pdf

investors PPT

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This press release from Muthoot Finance provides an overview of the company’s unaudited financial results for the quarter and half-year ending September 30, 2023. Here are the key points:

Financial Highlights:

  • Consolidated Loan Portfolio: Increased by 24% YoY to ₹79,493 Crores.
  • Gross Gold Loan Advance: Reached ₹84,742 Crores, the highest ever in any first half of a year.
  • Gold Loan Portfolio Growth: Achieved the highest ever growth of ₹5,642 Crores in the first half of a year.
  • Interest Collection: All-time high at ₹5,447 Crores for any half-year.
  • Consolidated Profit After Tax: Increased by 24% YoY to ₹2,140 Crores.
  • Standalone Profit After Tax: Rose by 18% YoY to ₹1,966 Crores.

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Subsidiaries:

  • Belstar Microfinance Ltd: Showed a substantial increase in loan portfolio, loan disbursement, and profit after tax.
  • Muthoot Homefin (India) Ltd: Achieved growth in gross loan AUM, loan disbursement, and profit after tax.
  • Muthoot Insurance Brokers Pvt Ltd: Recorded significant increases in total revenue and profit after tax.
  • Asia Asset Finance PLC, Sri Lanka: Demonstrated growth in total revenue and profit after tax.

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Other Key Highlights:

  • Branch Expansion: The group opened 331 new branches in H1FY24.
  • Public Issue: Raised ₹700 Crores through the 32nd Public Issue of Secured Redeemable Non-Convertible Debentures.
  • Digital Transactions: Nearly 39% of customer transactions now occur via digital channels.

Management Statements:

  • George Jacob Muthoot, Chairman: Emphasizes the growth in consolidated loan AUM and profit, highlighting strong performance in gold loan, microfinance, housing finance, and insurance broking businesses.
  • George Alexander Muthoot, Managing Director: Stresses the strong growth in gold loan assets, strategic focus on disbursements, operational efficiency, and margins.
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298

during the top of gold price cycle in 2021 , it traded at 5XBV where as now its trading at 2.2x . This stock would be a good proxy play on gold price

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299

Disc: not invested

300

gold price all time in international market
Live Gold Price Chart. surely nbfc will catch up

301

also recent dikkat to IFL on gold loan by RBI is good opportunity for Muthoot finance as well as manappuram . both this events could become strong tailwinds in growth and valuation

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