Muthoot Finance to benefit from improving gold loan segment: What makes it stock pick of the week

Improving outlook for gold loan segment is good news for a well entrenched player like Muthoot. Improving outlook for gold loan segment is good news for a well entrenched player like Muthoot.

Synopsis

In addition to its brand image, increasing its branch networks is also helping Muthoot. Due to steady business growth, analysts believe its gold loan portfolio will reach `1 lakh crore by 2024-25. Despite its fast growth, Muthoot is still trading at reasonable valuations.

Despite disruption in its branch operations during the first quarter of 2021-22, Muthoot’s gold loan business showed good resilience and its gold loan portfolio grew by 29% y-o-y. Muthoot is expected to report better numbers for the second quarter due to reopening of branches and improvement in gold loan demand. More and more cash stressed borrowers are now shifting to gold loans because of its lower turnaround time.

Muthoot was also able to

BY

ET Bureau

Oct 11, 2021, 06:30 AM IST

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