The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.
Motilal Oswal's research report on Muthoot Finance
Key highlights from our channel checks in Southern India for gold loan NBFCs in general and MUTH in particular are: a) teaser rates have not gone away – just that the 6.9% teaser rate has been replaced by 9.9%-11.9% teaser rates, b) banks and gold loan fintechs (despite the recent media coverage on Rupeek) have still not reduced their aggression, c) gold loan demand was weak in May’22 and redemptions were high because of the wedding season; but the demand has swiftly recovered in the first ten days of Jun’22 and gives hope to salvage the quarter, d) MUTH is re-pricing its teaser rate gold loans disbursed at 6.9% p.a. between Dec’21 and Mar’22 to higher interest rates of 9.9%-11.9%, which can have multiple implications with the most obvious being the potential for increase in the portfolio yields of the gold loan book.
Outlook
We delve deeper into each of these and also highlight a few questions that still remain unanswered. Our estimates are largely unchanged and we maintain our BUY rating on MUTH with a TP of INR1,220 (based on 2.0x FY24E P/BV).
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At 17:30 Muthoot Finance was quoting at Rs 1,030.85, down Rs 7.10, or 0.68 percent.
It has touched an intraday high of Rs 1,050.25 and an intraday low of Rs 1,025.05.
It was trading with volumes of 8,558 shares, compared to its thirty day average of 29,794 shares, a decrease of -71.28 percent.
In the previous trading session, the share closed down 2.24 percent or Rs 23.75 at Rs 1,037.95.
The share touched its 52-week high Rs 1,722.55 and 52-week low Rs 1,023.35 on 15 November, 2021 and 13 June, 2022, respectively.
Currently, it is trading 40.08 percent below its 52-week high and 0.86 percent above its 52-week low.
Market capitalisation stands at Rs 41,372.68 crore.
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