BUY Muthoot Finance:: nirmal bang,

Snapshot
A small player in the NBFC segment, Muthoot Capital is a part of the Pappachan Muthoot Group. The company is growing at a scorching pace in the financing of the two-wheelers and three-wheeler segment.
Investment Rationale Changing the business model at the right time: The company has changed the business model at the right time and shifted from the regulatory-impacted gold loan business to relatively stable and safer automobile finance business.
Strong growth expected going forward: The AUM of the company stood at approximately Rs.300 crore. We expect the company to reach a target of Rs.450-500 crore by the end of FY’13E.
Strong promoter holding: The promoter holding in the company stood at 77 per cent. In order to comply with the regulatory requirements, the holding has been reduced to marginally below 75 per cent.
Consistent dividend pay-out ratio: The company has got a consistent dividend pay-out ratio of around 25 per cent. We expect this trend to continue further and going by the earnings for H1FY’13, the company should pay a dividend of Rs.4 for FY’13E translating into a dividend-yield of ~4.5 per cent.

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Snapshot
A small player in the NBFC segment, Muthoot Capital is a part of the Pappachan Muthoot Group. The company is growing at a scorching pace in the financing of the two-wheelers and three-wheeler segment.
Investment Rationale Changing the business model at the right time: The company has changed the business model at the right time and shifted from the regulatory-impacted gold loan business to relatively stable and safer automobile finance business.
Strong growth expected going forward: The AUM of the company stood at approximately Rs.300 crore. We expect the company to reach a target of Rs.450-500 crore by the end of FY’13E.
Strong promoter holding: The promoter holding in the company stood at 77 per cent. In order to comply with the regulatory requirements, the holding has been reduced to marginally below 75 per cent.
Consistent dividend pay-out ratio: The company has got a consistent dividend pay-out ratio of around 25 per cent. We expect this trend to continue further and going by the earnings for H1FY’13, the company should pay a dividend of Rs.4 for FY’13E translating into a dividend-yield of ~4.5 per cent.