MUTHOOT FINANCE 2023-24 Annual Report Analysis

Wed, 11 Sep

MUTHOOT FINANCE 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 FINANCE Income Statement Analysis

• Interest income during the year rose 26.6% on a year-on-year (YoY) basis.
• Interest expenses were up by 29.0% YoY during the same period.
• Operating expenses increased by 31.8% YoY during the year.
• The company's net interest income (NII) increased by 25.2% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 949.1% in FY24 as against 1008.1% in FY23.
• Other income increased by 30.7% YoY during the year.
• Net profit for the year increased by 19.7% YoY.
• Net profit margins during the year declined to 28.7% in FY24 from 30.4% in FY23.

MUTHOOT FINANCE Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	118,977	150,617	26.6%
Other Income	Rs m	773	1,011	30.7%
Interest Expense	Rs m	42,248	54,516	29.0%
Net Interest Income	Rs m	76,728	96,101	25.2%
Operating Expense	Rs m	27,492	36,226	31.8%
Pre-provision Operating Profit	Rs m	50,009	60,886	21.7%
Provisions & Contingencies	Rs m	4,044	3,908	-3.4%
Profit before tax	Rs m	49,228	59,965	21.8%
Tax	Rs m	12,530	15,289	22.0%
Profit after tax	Rs m	36,123	43,243	19.7%
Minority Interest	Rs m	-575	-1,433	-149.4%
Net Interest Margin	%	1008.1	949.1
Net profit margin	%	30.4	28.7

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MUTHOOT FINANCE Balance Sheet Analysis

• The company's deposits during FY24 stood at Rs 3.0 bn as compared to Rs 3.3 bn in FY23, thereby witnessing a decrease of 10.8%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY23, a rise of 0.0%.
• Cost of deposits for MUTHOOT FINANCE rose 56.5% and stood at 23.4%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 10.1 bn during the year from Rs 7.6 bn in FY23.
• Borrowing stood at Rs 205.8 bn, a growth of 6.0% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 963.7 bn as against Rs 800.8 bn during FY23, thereby witnessing a rise of 20.3%.

MUTHOOT FINANCE Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	216,637	251,061	15.9%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	3,315	2,958	-10.8%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	14.9	23.4
Investments	Rs m	7,611	10,126	33.0%
Borrowings	Rs m	194,137	205,815	6.0%
Total Assets	Rs m	800,848	963,718	20.3%

Current Valuations for MUTHOOT FINANCE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 107.7, an improvement from the EPS of Rs 90.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,956.6, stands at 11.6 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 3.1 times, while the price to income ratio stands at 3.3 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	296.4	375.2
Earnings per share (Unadj.)	Rs	90.0	107.7
Diluted earnings per share	Rs	90.0	107.7
Avg P/E ratio	Rs	12.8	11.6
Avg P/ABV ratio	Rs	2.4	3.1
Avg Market Cap	Rs	460,742	503,523
Dividends per share (Unadj.)	Rs	22.00	24.00

Ratio Analysis for MUTHOOT FINANCE

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY24, from 0.0x 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 0.83x during FY24, from 0.91x 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 FINANCE's capital adequacy ratio (CAR) was at 30.4% as on 31 March 2024 as compared to 31.8% 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 17.2% during FY24, from 16.7% 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 deteriorated and stood at 4.49% during FY24, from 4.51% 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 13.40% during FY24, from 12.13% 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 FINANCE's gross NPA ratio stood at 0.0% as of 31 March 2024 compared to 0.0% 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 FINANCE was 2.9% in financial year 2024. This compared with 3.5% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	0.9	0.8
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	31.8	30.4
Return on Equity	%	16.7	17.2
Return on Assets	%	4.5	4.5
Return on Capital Employed	%	12.1	13.4
% of Gross NPAs	%	0.0	0.0
% of Net NPAs	%	3.5	2.9
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

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

MUTHOOT FINANCE Share Price Performance

Over the last one year, MUTHOOT FINANCE share price has moved up from Rs 1,295.2 to Rs 1,956.6, registering a gain of Rs 661.4 or around 51.1%.

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 FINANCE here and quarterly results for MUTHOOT FINANCE here)