Morgan Stanley has retained its equal-weight rating on Muthoot Finance stock/share while assigning a target price of ₹1,825, representing a downside potential of -17.32% from the current market price of ₹2,207.25.
Key highlights from Morgan Stanley’s report on Muthoot Finance stock:
- Revised EPS Estimates:
- EPS estimates for FY25, FY26, and FY27 have been raised by 1.6%, 3.4%, and 3.8%, respectively.
- The change reflects an adjusted AUM CAGR projection of ~20% for FY24-27, down from ~19% earlier.
- Improved NIM Projections:
- FY25-27 Net Interest Margin (NIM) forecast increased to an average of 11.6%, compared to 11.5% earlier.
- Cost of Equity Lowered:
- Cost of equity has been revised downward by 50 basis points to 12.5%, indicating a favorable funding environment.
- SOTP Value Revision:
- A combination of earnings upgrades and margin enhancements has resulted in a ~14% increase in SOTP scenario values and the target price.
Muthoot Finance outlook remains steady
While Morgan Stanley acknowledges the adjustments in earnings and cost metrics, the equal-weight rating suggests a neutral stance, balancing potential risks and opportunities in the current operating environment.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice. Readers are advised to consult their financial advisors before making investment decisions.
