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.



Analysis URL:

History of Consistently Increasing Sales, Earnings & Cash Flow Had 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.

Future Growth Drivers Gold 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 Average Yes. image
Low CAPEX required to maintain current operations Yes. image
Management is holding / buying the stock 80% is the promoter holding image
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 growth Not.  Company is revolving around the IPO price. image

Additional Futurecaps Checklist

PE, PB Ratio PE 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, Tax Yes. image
EPS Growth Rate Not. image
Expected Gain in 10 Years    image
Power of Brand Have a good brand.  image
Corporate Governance, Reputation of Leaders Yes.  image
Fraud reported Not. 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.

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