Muthoot Finance Ltd.
ISIN: INE414G01012 • Market Cap: ₹1.15 Lakh Cr
The 5-Pillar Quality Audit for Muthoot Finance Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (82.4%), Return on Capital Employed (18.9%), and equity compounding (27.1%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 3.88 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (30.4%) and 3Y PAT CAGR (38.4%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 10.09 vs PEG of 0.71 and Dividend Yield of 1.1%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 73.3%, backed by 22.4% institutional ownership.
Key Fundamental Strengths
Robust Equity Compounding (ROE: 27.1%)
Shareholder equity compounds at a healthy 27.1%, exceeding average Indian equity benchmarks.
Strong Topline Expansion (3Y Sales CAGR: 30.4%)
Revenue has expanded at 30.4% CAGR over 3 years, signaling industry market-share gains.
High-Velocity Profit Compounding (3Y PAT CAGR: 38.4%)
Net earnings have compounded at 38.4% annualized, demonstrating operating leverage.
Attractive Valuation Margin (P/E: 10.09)
Trading at a P/E multiple of 10.09, the stock offers a favourable risk-reward entry for quality compounding.
Areas to Watch & Potential Risks
Elevated Financial Gearing (D/E: 3.88)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Sectoral & Macro Headwinds (Financial Services)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Financial Services space.
Quantitative Strategy Eligibility
Checking MUTHOOTFIN against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Passes Saurabh Mukherjea's Coffee Can rule: 10%+ sustained revenue growth and 15%+ ROCE/ROE.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 79/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Provides balanced valuation margin with strong profitability scores.
Financial Services Sector Peer Comparison
Compare MUTHOOTFIN directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Muthoot Finance Ltd. (MUTHOOTFIN)Current | 79/100 | ₹1.15 Lakh Cr | 10.09 | 18.9% | 3.88 | — |
| HDFC Bank Ltd. (HDFCBANK) | 74/100 | ₹11.10 Lakh Cr | 14.05 | 12.8% | 1.01 | View |
| ICICI Bank Ltd. (ICICIBANK) | 76/100 | ₹10.06 Lakh Cr | 17.94 | 16.5% | 0.62 | View |
| State Bank of India (SBIN) | 71/100 | ₹9.66 Lakh Cr | 11.20 | 12.2% | 1.38 | View |
| Bajaj Finance Ltd. (BAJFINANCE) | 68/100 | ₹6.72 Lakh Cr | 33.07 | 13.9% | 3.86 | View |
| Life Insurance Corporation of India (LICI) | 87/100 | ₹5.22 Lakh Cr | 8.70 | 37.8% | 0.00 | View |
Frequently Asked Questions: Muthoot Finance Ltd.
Q:What is the 5-Pillar Fundamental Score for Muthoot Finance Ltd. (MUTHOOTFIN)?
Muthoot Finance Ltd. has a RupeeTools Fundamental Score of 79/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (90/100), Financial Health (44/100), Growth (99/100), Valuation (85/100), and Ownership Quality (82/100).
Q:Is MUTHOOTFIN fundamentally strong for long-term investment?
Yes, MUTHOOTFIN exhibits solid fundamental strength with a 79/100 score, driven by a return on equity of 27.1% and a debt-to-equity ratio of 3.88.
Q:Does MUTHOOTFIN pass the Coffee Can Investing filter?
Yes! MUTHOOTFIN satisfies both core pillars of Coffee Can Investing: achieving consistently high capital returns (ROCE/ROE >= 15%) alongside double-digit multi-year revenue growth.
Q:How does MUTHOOTFIN compare against other Financial Services peers?
Within India's Financial Services sector, MUTHOOTFIN trades at a P/E of 10.09 and generates an ROCE of 18.9%. Compare its 5-Pillar score of 79/100 against top sector peers like HDFC Bank Ltd. (74/100), ICICI Bank Ltd. (76/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.