CMP: 121

Muthoot Finance Ltd. is a gold financing company. The Company provides personal and business loans secured by gold jewellery, or Gold Loans primarily to individuals who possess gold jewelry but can't access formal credit lines.

Muthoot Finance is a good bet in Gold Loan segment mostly beaten down due to RBI Regulations. The regulations are a short term bad news, growth will take over soon. Its currently trading at a P/E of 5 making it attractive. Revenues have risen rapidly from 358 Crores to 4537 Crores in the last 5 years. Profits have risen even more rapidly from 63 Crores to 892 Crores in the last 5 years. NPM has risen from 18% to 20% over the last 5 years. Growth has slowed down, but is still a better bet. Buy and accumulate on deeper dips.