This Midcap NBFC Stock Trading Near 52 Week Low, Buy For Strong 41% Gains, Says Chola Wealth Direct

Chola Wealth Direct has assigned a "buy" to the stock of Muthoot Finance Ltd (MUTH) with a target price of Rs 1,350/share. If you buy the stock at the current market price, it can give a healthy return of 41%. This is a midcap stock operating in the Financial sector as NBFC-Gold. It has a market capitalisation of Rs 38,488.76 crore.

Stock Outlook - 52 Week Low/High, Market Price, & Returns

The last traded share price of Muthoot Finance is Rs 958.75/share, down 0.69% from its previous close of Rs 965.40 apiece. The stock is trading near 1.2% away from its 52 week low of Rs 947.40/share. The stock's 52 week high is Rs 1,448/share.

The stock has given 3.16% negative return in the past 1 week. It gave 5.09% negative return in 1 month and 11.06% in 3 months, respectively. It has fallen 28.82% in 1 year. It gave 3.01% positive return in 3 years and 145.36% in 5 years, respectively.

 

Buy for a target price of Rs 1350/share

According to Chola Wealth Direct, "The tradeoff between loan growth and margin, which has been evident in the last five quarters, will persist in the foreseeable future. We expect the continued aggression of banks and FinTechs will start easing many realised that gold loan is a very operationally challenging business. They started facing issues in acquisition and storage, and frauds, and started realising the difficulties in the sector."

The brokerage said, "MUTH, in our view, is unlikely to pursue gold loan growth at the cost of profitability. With pressure from banks and fintech will start subsiding and teaser loan rates impact vanishing we expect 10% growth in standalone AUMin FY24. We continue stay positive on the Muthoot finance with expectation of regaining some lost market share starting FY 24 and returning to double digit growth rate in Q2 of FY24. Maintaining our buy rating on the stock with TP of 1350 (based on 2.2 times FY24 BVPS."

 

Disclaimer

The stock has been picked from the brokerage report of Chola Wealth Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.