Investors may be overplaying Muthoot Finance's growth prospects

Pace of new customer addition is slowing; lending to existing customers is on the rise

Muthoot Finance, the country’s leading gold loan company, has emerged the most popular option among non-banking financial companies (NBFCs), with over 80 per cent of analysts polled by Bloomberg optimistic on the stock. Its stock price has increased over 67 per cent in a year, while its peers haven’t fared well. The stock rose by 6.9 per cent on the BSE on Wednesday, in response to its decent December quarter (Q3) results.

However, there are some points that need monitoring.

The lender’s customer pool declined marginally to 1.5 million from 1.6 million a year ago, while it increased sequentially from 1.4 million