Shares of Muthoot Finance rallied 8 per cent to hit a new high of Rs 1,533 on the BSE in intra-day trade on Thursday after the firm reported a strong set of numbers for the quarter ended March (Q4FY21) with healthy business growth and improved asset quality. With today's gain, the scrip has surged 17 per cent in two trading days.
Muthoot Finance, the largest gold financing company in India in terms of the loan portfolio, registered an increase in net profit of 22 per cent year-on-year (YoY) at Rs 995 crore in Q4FY21. The assets under management (AUM) for the quarter under review grew 26.5 per cent YoY to Rs 52,622 crore, which was driven by gold AUM, up 27 per cent YoY.
Asset quality improved as the gross non-performing assets (GNPA) ratio was down to 0.88 per cent compared with 1.3 per cent in the December quarter. Net interest income was up 18 per cent YoY at Rs 1,837 crore, aided by healthy AUM growth.
“Muthoot Finance delivered a strong 4QFY21, especially on the growth front. Despite the 10-12 per cent decline in gold prices, it managed to grow the loan book by 4 per cent quarter-on-quarter (QoQ), which is encouraging. Even in the second COVID wave, loan demand is likely to remain high as customers’ cash flows will be stressed,” Motilal Oswal Securities said in the result update.
The brokerage firm expects the company to deliver around 15 per cent loan growth in the medium term. "With an AA+ rating, the cost of funds is likely to decline. This should mitigate yield pressure if any. RoA/RoE is likely to remain robust at 6.5 per cent/25 per cent over the medium term," it said.
At 10:17 am, Muthoot Finance was up 8 per cent at Rs 1,531 on the BSE, as compared to a 0.54 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped more than twofold with a combined 5.7 million shares having changed hands on the NSE and BSE so far.
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