Muthoot Finance’s share price rose in the morning session today i.e. on March 3 as research firm Motilal Oswal made a buy call on the stock with a target of Rs 1,750 and a gain of 26 percent. Gave. During the morning at around 09:41 am, the company’s stock was trading at Rs 1,421.45, up Rs 32.90 or 2.37 percent on the BSE. It also touched an intraday high of Rs 1,429.15 and an intraday low of Rs 1,399.
The brokerage firm said that Muthoot Finance is their top pick from the NBFC space for 2022. Standalone AUM (Asset Under Management) has registered 17% Compound Annual Growth Rate (CAGR) in FY 16-21. The company had registered a CAGR of 19/15/14% for two/three/four years as on March 2020 even before the outbreak of COVID-19 and sharp jump in gold prices in FY21. Higher gold prices have increased the demand for gold loans. Apart from this, Muthoot Finance has a strong brand and a well-spread distribution network. The company’s network will help in increasing the market share for loans against gold.
The brokerage believes that Muthoot Finance is expected to grow its business with the strong track record of management and the preparation of the next generation of the family to take leadership positions in the future. Motilal Oswal further added that the company will continue to be the primary choice of customers due to its AA+ credit rating and competitive offer of low lending rates.
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In an interview with CNBC-TV18, George Alexander Muthoot, MD, Muthoot Finance said that this is a good sign that gold prices remain stable. He believes that the demand for gold loans will pick up with the increase in overall credit growth.
He further said that the third quarter remained flat as far as growth is concerned. We are seeing that growth is being seen across the country and from here the economy will also start rising.
While the brokerage believes that the gold loan market is expanding. He added that the company will perform better in Q4 than in Q3.
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