Muthoot remains an all-weather stock ideally placed to ride the gold financing theme, and should deliver a steady return. For the risk-takers, given the tailwind of economic revival and the valuation discount to Muthoot, Manappuram could offer a stronger upside in the medium term
PRO Only Highlights
– Quarterly performance largely backed by improved realisations
– Medium-term triggers China plus and protectionist measures for tyre industry
– Valuations not inexpensive; but improved medium-term outlook
Gold financing became a rage after the first wave of the pandemic, with every lender chasing this business given the large stock of gold lying idle in Indian households. For borrowers, it offered an easy access to liquidity, by pledging the gold, to tide themselves over the pandemic-led cash crunch. The secured nature of the lending, which makes it almost risk-free for the lender, added to its attractiveness. The business soared and the two leading names — Muthoot Finance…
