External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<div><div><div><div><ul><li>Teaser rates have not gone away – 6.9% replaced with 9.9%-11.9% rates</li><li>We agree with consensus to the extent that the 6.9% p.a. (0.57%p.m.) products have been withdrawn by the gold loan NBFCs and that disbursement yields in 1QFY23-QTD are much better than the insanity that was evident in the gold lending segment in 4QFY22. </li><li>However,westillchoosetocallthe9.9%-11.9%goldloanproductsasteaser- rate products since: a) these products are being offered at ticket sizes above INR50K (albeit with a lower LTV of 65%), and b) we believe that if MUTH continues to offer these interest rate products, there is a risk to the compression in the blended portfolio yields (in FY23E) despite the sequentially higher disbursement yields in 1QFY23E.</li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Teaser rates have not gone away – 6.9% replaced with 9.9%-11.9% ratesWe agree with consensus to the extent that the 6.9% p.a. (0.57%p.m.) products have been withdrawn by the gold loan NBFCs and that disbursement yields in 1QFY23-QTD are much better than the insanity that was evident in the gold lending segment in 4QFY22. However,westillchoosetocallthe9.9%-11.9%goldloanproductsasteaser- rate products since: a) these products are being offered at ticket sizes above INR50K (albeit with a lower LTV of 65%), and b) we believe that if MUTH continues to offer these interest rate products, there is a risk to the compression in the blended portfolio yields (in FY23E) despite the sequentially higher disbursement yields in 1QFY23E.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Muthoot Finance - Channel Checks in Southern India: A Few Interesting Insights

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

A Relationship Beyond Broking

Nirmal Bang, one of the leading stock broking companies in India, caters to retail and institutional clients by offering them a range of financial products and services, including equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS.

Nirmal Bang is drawn from a diversity of professional backgrounds, and blend of experience, skill and dedication is shared with its clients. Nirmal Bang emphasizes adequate, thorough research local and world-wide developments, balancing these with the astute discovery of intrinsic values, synergies and growth. The aim is simply to help the investors to maximize their returns.

<div><div><div><div><ul><li>Volume growth slows; guiding for 12-15% growth in FY23: Overall gold loan AUM increased by 10.8% YoY and 6.1% QoQ.</li></ul><div><div><div><div><ul><li>While we note the growth in absolute value, underlying trends indicate this was driven by a higher ticket size and increasing customer leverage while customer growth indicators weakened, possibly due to heightened competition from smaller NBFCs and banks. </li></ul><div><div><div><div><ul><li>Total stock of gold holding (in tonnes) increased to 187, up 9.4% YoY and 5.1% QoQ.</li></ul></div></div></div></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Volume growth slows; guiding for 12-15% growth in FY23: Overall gold loan AUM increased by 10.8% YoY and 6.1% QoQ.While we note the growth in absolute value, underlying trends indicate this was driven by a higher ticket size and increasing customer leverage while customer growth indicators weakened, possibly due to heightened competition from smaller NBFCs and banks. Total stock of gold holding (in tonnes) increased to 187, up 9.4% YoY and 5.1% QoQ.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Muthoot Finance - Competition Impact Visible

<ul><li>Will continue to stand tall despite the many challengers Muthoot Finance (MUTH') is our top pick for CY22 in the NBFC Lending space.</li><li>Our investment idea is premised on our thesis of a structural opportunity in Gold lending as the market pie expands with customers evolving, taboo around Gold loans fading away, and apprehensions regarding Gold loans addressed through customer education.</li><li>In this report, we list MUTH's competitive strengths vis--vis its peers and some of the challengers like Fintech Gold loan NBFCs.</li></ul><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Will continue to stand tall despite the many challengers Muthoot Finance (MUTH') is our top pick for CY22 in the NBFC Lending space.Our investment idea is premised on our thesis of a structural opportunity in Gold lending as the market pie expands with customers evolving, taboo around Gold loans fading away, and apprehensions regarding Gold loans addressed through customer education.In this report, we list MUTH's competitive strengths vis--vis its peers and some of the challengers like Fintech Gold loan NBFCs.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Will continue to stand tall despite the many challengers

<ul><li>For MUTH, 3QFY22 was characterized by: interest cost savings, which led to an in line PPOP/PAT performance; elevated Gold loan auctions of INR28b, which resulted in gold AUM remaining largely flat QoQ, stable spreads of 13%, despite an aggressive competitive landscape; GS3 increasing by ~200bp QoQ to 3.8%, suggesting that auctions will remain elevated in 4QFY22 as well to pare down GS3 to the management's guided level of 2-3%.</li><li>We estimate MUTH to deliver a gold loan growth of ~10% in FY22E.</li><li>However, this incremental growth in 4Q will come at the cost of a minor compression in spreads/margin,.</li></ul><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

For MUTH, 3QFY22 was characterized by: interest cost savings, which led to an in line PPOP/PAT performance; elevated Gold loan auctions of INR28b, which resulted in gold AUM remaining largely flat QoQ, stable spreads of 13%, despite an aggressive competitive landscape; GS3 increasing by ~200bp QoQ to 3.8%, suggesting that auctions will remain elevated in 4QFY22 as well to pare down GS3 to the management's guided level of 2-3%.We estimate MUTH to deliver a gold loan growth of ~10% in FY22E.However, this incremental growth in 4Q will come at the cost of a minor compression in spreads/margin,.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Gold loan growth flat QoQ; auctions to stay elevated in 4QFY22

India

Muthoot Finance Ltd is an Indian non-banking financial company and the largest gold loan NBFC in the country. The company primarily provides personal and business loans secured by gold jewelry, and also offers other loans, insurance, money transfer services, and sells gold coins. It is headquartered in Kochi, Kerala, India, and was founded in 1939.

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Muthoot Finance (MUTH IN)

Muthoot Finance - Channel Checks in Southern India: A Few Interesting Insights

We delve deeper into each of these and also highlight a few questions that still remain unanswered. Our estimates are largely unchanged and we...

Motilal Oswal

Muthoot Finance - Competition Impact Visible

While gold loan growth came in slightly ahead of our estimate, the yield compression was a negative surprise. The company has been running teaser...

Nirmal Bang

Will continue to stand tall despite the many challengers

Will continue to stand tall despite the many challengers Muthoot Finance (MUTH') is our top pick for CY22 in the NBFC Lending space. Our...

Motilal Oswal

Will continue to stand tall despite the many challengers

Will continue to stand tall despite the many challengers Muthoot Finance (MUTH') is our top pick for CY22 in the NBFC Lending space. Our...

Motilal Oswal

Gold loan growth flat QoQ; auctions to stay elevated in 4QFY22

For MUTH, 3QFY22 was characterized by: a) interest cost savings, which led to an in line PPOP/PAT performance; b) elevated Gold loan auctions of...

Motilal Oswal

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Market Cap (USDm)

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Muthoot Finance - Channel Checks in Southern India: A Few Interesting Insights

We delve deeper into each of these and also highlight a few questions that still remain unanswered. Our estimates are largely unchanged and we...

Motilal Oswal

Muthoot Finance - Competition Impact Visible

While gold loan growth came in slightly ahead of our estimate, the yield compression was a negative surprise. The company has been running teaser...

Nirmal Bang

Will continue to stand tall despite the many challengers

Will continue to stand tall despite the many challengers Muthoot Finance (MUTH&#x27;) is our top pick for CY22 in the NBFC Lending space. Our...

Motilal Oswal

Will continue to stand tall despite the many challengers

Will continue to stand tall despite the many challengers Muthoot Finance (MUTH&#x27;) is our top pick for CY22 in the NBFC Lending space. Our...

Motilal Oswal

Gold loan growth flat QoQ; auctions to stay elevated in 4QFY22

For MUTH, 3QFY22 was characterized by: a) interest cost savings, which led to an in line PPOP/PAT performance; b) elevated Gold loan auctions of...

Motilal Oswal

Will continue to stand tall despite the many challengers Muthoot Finance (MUTH') is our top pick for CY22 in the NBFC Lending space. Our...

Will continue to stand tall despite the many challengers Muthoot Finance (MUTH') is our top pick for CY22 in the NBFC Lending space. Our...