Gold Financing Companies

CRISIL Ratings believes MFL's capitalisation and asset quality will remain strong supported by its gold loan business.

Increased competition, lower spreads, moderate growth are among hurdles to overcome

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Analysts believe the continued aggression of banks and fintechs would make gold loan NBFCs pivot their business models to lower spreads and margin

Shares of gold finance firms, such as Muthoot Finance and Manappuram Finance, may come under pressure because of the softness in the price of yellow metal

Gold financing company says it will hire 600 more people for the expansion

Analysts have cut earnings growth forecast but see the stocks giving up to 34.4 per cent (Muthoot) and 58.7 per cent (Manappuram) returns on attractive valuation

The share price of Muthoot Fin has risen 31% over last year, but Manappuram underperformed with 9% return

Muthoot Finance is headed towards Rs 1,700 levels

While gold experts remain bullish on the yellow metal, analysts tracking the two non-bank finance companies (NBFCs) believe near-term headwinds continue to dampen outlook for the stocks

The trend in Muthoot Finance's stock looks promising as it is trading well above the 200-days moving average (DMA) placed at Rs 1,059 levels

Risks are similar to loan against property; both are dependent on pricing strength and demand of the underlying assets

Despite the strong gains in gold and silver prices, many experts believe the momentum in precious metals will continue

Quality stocks in banking and financial services sector are still available at attractive valuations

Rally factors in strong performance of Muthoot and Manappuram

The commentary by technical analysts has moved from 'sell on rallies' to 'buy the dips', with most expecting the bullish momentum, seen over the past three weeks, to sustain

Backing of a liquid collateral and pricing power augur well

Given the uncertainties in the market, analysts suggest incumbent investors should stay put in the stock, even as new investors may buy on further dip.

Second bond issue from the firm after it placed $450 mn for 3-year tenor at 6.13% in Oct 2019

At Rs 36,620 crore m-cap, the stock displaced AU Small Finance Bank, PNB and Shriram Transport among notable names