Muthoot Cap.Serv (MUTHOOTCAP)

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Trades at a 48% discount to book value: P/B 0.52 versus book value of ₹391.93
• Strong promoter holding of 63.33% aligns promoter interests with minority shareholders
• Sales growth of 23.39% indicates the business is expanding its top line
• ROCE of 11.01% suggests underlying operating capital is earning a reasonable return
• Small market cap of ₹379 Cr leaves room for niche growth if execution improves

Concerns

• ROE is just 1.91%, meaning shareholder capital is earning very little
• Net profit fell 39.09% even as sales grew 23.39%, showing poor conversion or rising costs
• Debt/equity of 4.49 is high and amplifies financial risk in a lending business
• Piotroski F-score of 4/9 and P/E of 31.02 reflect weak financial health and expensive earnings

AI Analysis

At ₹205, Muthoot Cap.Serv trades at only 0.52 times book value of ₹391.93. Benjamin Graham taught me to seek a margin of safety, and on the surface this appears. But a deeper look reminds me that a low price-to-book is not enough. The business earns a meagre 1.91% ROE; with debt/equity at 4.49, this leverage is working for lenders, not shareholders. While ROCE of 11.01% shows some operating efficiency, the net profit fell 39.09% despite sales growing 23.39%. That tells me the company is expanding the top line but not converting it to bottom line—perhaps costs, credit costs, or margins are squeezing. The latest quarter's net profit of ₹8 Cr on sales of ₹155 Cr is only around 5% margin, not a robust franchise. Piotroski F-score of 4/9 reinforces weak fundamentals. P/E of 31.02 is absurd for a business with negative profit momentum; a value investor pays a low P/E unless growth is proven. Sales growth of 23.39% is a positive, but I cannot ignore that net profit is going backward. Promoter holding at 63.33% is good alignment, and no dividend means I get paid only if book value or price grows. This looks like an asset play: a stock selling well below book, but with mediocre returns and high leverage. If ROE stays near 2%, book value will grow slowly, and the discount may persist or widen. I would need a much stronger balance sheet and evidence of profit recovery before treating this as a wonderful business at a fair price. For now, it is a possible bargain asset, not a compounder.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer