MUTHOOT CAPITAL 2023-24 Annual Report Analysis

Wed, 11 Sep

MUTHOOT CAPITAL has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during the year 2023-24.

MUTHOOT CAPITAL Income Statement Analysis

• Interest income during the year fell 10.0% on a year-on-year (YoY) basis.
• Interest expenses were up by 13.1% YoY during the same period.
• Operating expenses declined by 11.3% YoY during the year.
• The company's net interest income (NII) decreased by 21.6% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 11.7% in FY24 as against 17.0% in FY23.
• Other income increased by 617.9% YoY during the year.
• Net profit for the year increased by 55.9% YoY.
• Net profit margins during the year increased to 30.8% in FY24 from 17.8% in FY23.

MUTHOOT CAPITAL Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	4,426	3,984	-10.0%
Other Income	Rs m	4	30	617.9%
Interest Expense	Rs m	1,481	1,676	13.1%
Net Interest Income	Rs m	2,944	2,308	-21.6%
Operating Expense	Rs m	1,854	1,645	-11.3%
Pre-provision Operating Profit	Rs m	1,094	694	-36.6%
Provisions & Contingencies	Rs m	271	192	-29.4%
Profit before tax	Rs m	1,088	1,643	51.0%
Tax	Rs m	301	417	38.4%
Profit after tax	Rs m	787	1,227	55.9%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	17.0	11.7
Net profit margin	%	17.8	30.8

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MUTHOOT CAPITAL Balance Sheet Analysis

• The company's deposits during FY24 stood at Rs 327 m as compared to Rs 378 m in FY23, thereby witnessing a decrease of 13.4%.
• Advances for the year stood at Rs 18.6 bn as compared to Rs 16.8 bn during FY23, a rise of 10.4%.
• Cost of deposits for MUTHOOT CAPITAL fell 29.0% and stood at 7.4%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 1.1 bn during the year from Rs 0.5 bn in FY23.
• Borrowing stood at Rs 7.2 bn, a fall of 18.7% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 22.6 bn as against Rs 23.4 bn during FY23, thereby witnessing a fall of 3.6%.

MUTHOOT CAPITAL Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	4,893	6,117	25.0%
Advances	Rs m	16,807	18,550	10.4%
Deposits	Rs m	378	327	-13.4%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	10.4	7.4
Investments	Rs m	482	1,113	130.9%
Borrowings	Rs m	8,807	7,159	-18.7%
Total Assets	Rs m	23,429	22,588	-3.6%

Current Valuations for MUTHOOT CAPITAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 74.6, an improvement from the EPS of Rs 47.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 359.0, stands at 4.8 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.0 times, while the price to income ratio stands at 1.5 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	269.1	242.2
Earnings per share (Unadj.)	Rs	47.8	74.6
Diluted earnings per share	Rs	47.8	74.6
Avg P/E ratio	Rs	5.3	4.8
Avg P/ABV ratio	Rs	1.4	1.0
Avg Market Cap	Rs	4,158	5,901
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for MUTHOOT CAPITAL

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 5,672.2x during FY24, from 4,451.7x during FY23. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio decreased and stood at 1.22x during FY24, from 1.88x during FY23. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): MUTHOOT CAPITAL's capital adequacy ratio (CAR) was at 31.3% as on 31 March 2024 as compared to 27.9% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company improved and stood at 20.1% during FY24, from 16.1% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company improved and stood at 5.43% during FY24, from 3.36% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 14.27% during FY24, from 11.64% during FY23. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. MUTHOOT CAPITAL's gross NPA ratio stood at 10.2% as of 31 March 2024 compared to 20.6% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of MUTHOOT CAPITAL was 3.4% in financial year 2024. This compared with 2.6% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	4,451.7	5,672.2
Debt to Equity Ratio	x	1.9	1.2
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	27.9	31.3
Return on Equity	%	16.1	20.1
Return on Assets	%	3.4	5.4
Return on Capital Employed	%	11.6	14.3
% of Gross NPAs	%	20.6	10.2
% of Net NPAs	%	2.6	3.4
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how MUTHOOT CAPITAL has performed over the last 5 years, please visit here.

MUTHOOT CAPITAL Share Price Performance

Over the last one year, MUTHOOT CAPITAL share price has moved down from Rs 405.2 to Rs 359.0, registering a loss of Rs 46.2 or around 11.4%.

Overall, the S&P BSE SENSEX is up 22.2% over the year.

(To know more, you can check out historical annual results for MUTHOOT CAPITAL here and quarterly results for MUTHOOT CAPITAL here)