Muthoot Finance share price plunges over 7% after Q2 results miss estimates; should you buy?
Muthoot Finance share price declined more than 7% in early trade on Friday after the company’s September quarter results missed analysts’ estimates. Muthoot Finance shares fell as much as 7.31% to ₹1,217.05 apiece on the BSE. The gold financing company Muthoot Finance reported a smaller-than-expected rise in its second-quarter net profit, hurt by high finance costs.
The company’s net profit in Q2FY24 rose 14.3% to ₹991 crore from ₹867 crore in the year-ago quarter. The company’s net interest income (NII) during the second quarter of FY24 increased 18.2% to ₹1,858.4 crore from ₹1,572 crore, YoY. Also Read: Mamaearth's parent Honasa Consumer share price cracks over 15%, down 21% from issue price The Kerala-based company’s finance costs rose by more than 28%, taking total expenses nearly 30% higher to ₹1,743 crore.
The NBFC said its loan assets stood at ₹69,002 crore in H1FY24 as compared to ₹57,230 crore in H1FY23, registering a growth of 21% YoY. Muthoot Finance’s Q2FY24 earnings undershot consensus by 6% due to a miss on NII. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) Brokerage firm Nuvama Institutional Equities said that including Muthoot’s first-ever ARC sale of ₹7 billion, AUM grew 3% QoQ and 21% YoY, lower than 7% QoQ and its estimate of 5%.
“The spread declined to 9.19% from 9.67% QoQ. NPLs rose sharply by 20% QoQ. Muthoot sold NPLs of ₹7 billion to an ARC on a par to avoid auctioning as a customer friendly policy," Nuvama noted.
Read more on livemint.com
