Muthoot Microfin Limited is it next JP Morgan?

Stock Opportunities Not-so-Hidden Gems
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With a noble wish founded in April 1992, Muthoot Microfin Limited, a subsidiary of Muthoot Pappachan Group, provides micro-loans to female customers with a focus on rural regions in India.
http://www.muthootmicrofin.com/

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Pros:
Reliable and strong promoter group
Low retail holding, getting lower
Niche targetted group
Good CAGR, high OPM
CONS:
Low interest coverage ratio.
Want your takes on this NBFC.

Disc: Holding 0.1% of PF.

2 Likes
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Net profit is one of the important indicators to show the financial health of the company. Net profit of Muthoot Microfin is Rs 163.89 Cr and the compounded growth of profit in the past 3 years is 108.02 %. The PAT margin of Muthoot Microfin is 11.47 %.

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Muthoot Microfin, I feel has good growth story ahead, Here are my thoughts about it:

  1. Last year they had 163 Cr Profit. This year they will clock close to 500 Cr.
  2. Currently it is having a PE of 23 as per Screener, after they report annual results it will be close to 8, that will be dirt cheap.
  3. Recently they got 750 Cr in IPO money which is not costing them anything. so considering any Microfin charges 22-23% interest, they are set to get additional 200 odd crores of profit.
  4. They are expanding beyond Kerala and hopefully that growth will add additional headwinds.
  5. Whatever i read about the group, looks like they are honest set of people.
  6. Also, CEO is a professional and not from family which i feel is additonal plus.
  7. Family holds good amount of holding, meaning skin in the game.
  8. If i look at the other listed players, this stock should be going to around 20K crore market share easily in next few years.

Disc: No recommendations, i am invested.

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How has the company performed across cycles like during demon, covid? How was their asset quality in times of stress vs industry?

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Go through this https://muthootmicrofin.com/wp-content/uploads/2023/07/DRHP.pdf