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Muthoot Finance share rises over 7% on strong Q3 earnings; Motilal Oswal retains buy call

Muthoot Finance share touched an intraday high of Rs 1,273, rising 7.34% against previous close of Rs 1,186 on BSE

twitter-logoBusinessToday.In | February 10, 2021 | Updated 18:34 IST
Muthoot Finance share rises over 7% on strong Q3 earnings; Motilal Oswal retains buy call
Muthoot Finance share stands higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Muthoot Finance share gained over 7% intra day after the gold financing firm reported a 22 percent rise in standalone profit after tax for the quarter ended December 2020. The stock has gained 8.63% in the last 3 days. The stock opened with a gain of 2.36% at Rs 1,214 on BSE.

The share touched an intraday high of Rs 1,273, rising 7.34% against previous close of Rs 1,186. Muthoot Finance share stands higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The share has gained 66.68% in one year and risen 4.75% since the beginning of this year. Later, the stock closed 6.90% or Rs 81.80 higher at Rs 1,267. 

Market cap of the firm stood at Rs 50,862 crore. The firm reported PAT at Rs 991.4 crore for the quarter ended December 2020 against a profit of Rs 815.2 crore in the year-ago period. Total income grew 20 per cent to Rs 2,777 crore from Rs 2,321 crore earlier.

"The growth during the quarter was very good. Our standalone loan assets have crossed the landmark of Rs 50,000 crore. Our active customers presently having a loan account also crossed the landmark of 50 lakh customers," the company's Managing Director George Alexander Muthoot said.

During the quarter, gold loan assets increased by Rs 3,389 crore to Rs 49,622 crore.

Meanwhile, Motilal Oswal has buy call on Muthoot Finance stock. It has given with a target price of Rs 1,500.

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"After several quarters of stagnant customer and loan count, 4-5% sequential growth this quarter is encouraging. As the economy recovers from the shock of the pandemic, loan demand is likely to remain high. The brokerage expects the company to deliver 12-15% loan growth post FY21.

Incremental cost of funds is 100bps lower than on-book cost of funds - this should mitigate yield pressure, if any. RoA/RoE is likely to remain robust at 7%/27% over the medium term. The brokerage raised EPS estimates by 6-7%, factoring in stronger growth and lower opex," the brokerage said.

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