Muthoot Finance – Multibagger Analysis

Muthoot Finance – Multibagger Analysis

Muthoot Finance focuses mainly in the gold loan segment.  The company also an emerging player in the money transfer, wealth management services.


Website: http://www.muthootfinance.com/

Analysis URL: http://www.screener.in/company/533398

History of Consistently Increasing Sales, Earnings & Cash FlowHad 100% growth in every years except 2013-14.  (Tremendous growth impacted due to new RBI rules)image
Durable Competitive Advantage Company faced a hit due to RBI rules.image
Future Growth DriversGold Price peaking should bring back the sheen of this stock price.image
Conservative Debt (long term debt < 3 Net Profit)Not.image
Return on Equity must be Above AverageYes.image
Low CAPEX required to maintain current operationsYes.image
Management is holding / buying the stock80% is the promoter holdingimage
Price is Under Valued (< intrinsic value)Not.image
Stock Price is consolidating (now)Not.image
Stock Price is growing in past years along with EPS growthNot.  Company is revolving around the IPO price.image


Additional Futurecaps Checklist

PE, PB RatioPE at 9 & PB at 1.5 which is good.image
Cash Flow Positive, Net Profit % greater than 8%Cash Flow is Positive, But operating cash flow is negative.  Net Profit is just around 8%.image
Paying Dividends, TaxYes.image
EPS Growth RateNot.image
Expected Gain in 10 Years image
Power of BrandHave a good brand. image
Corporate Governance, Reputation of LeadersYes. image
Fraud reportedNot.image

Warning: This is a gold-price dependent player.  Gold Price is trading 30% down from peak.  Restoring of Gold Price to the Peak should make this company gain 3X-5X profits.


Here by we declare that Muthoot Finance is a multibagger contingent to gold-price peak.


2% to 3% of your portfolio.


Futurecaps recommends 20 to 25 multibaggers per year, we recommend a 25% to 50% allocation of your savings in equity.  The stocks recommended here are gone through Analysts of several years experience in stock market.  Although they were successful in predicting future multibaggers, the overall stock market is a risky game.  So we recommend the reader to put his/her own thoughts & invest wisely.

About Futurecaps

Futurecaps is a 12+ year experienced Indian Stock Market Advisory with SEBI Registration.

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