Muthoot Capital Services Limited

Financial Services — Credit Services · NSE

₹215.80−₹1.28 (−0.59%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by short-term liabilities exceed short-term assets, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Muthoot Capital Services Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Muthoot Capital Services Limited, a non-banking finance company, provides fund and non-fund-based financial services in India.

IndustryCredit Services

SectorFinancial Services

Employees2,531

Annual revenue₹595 Cr

How does it make money?

Turns over ₹595 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹50 left at the operating level before interest, tax and depreciation. Each of its 2,531 employees supports ₹23.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹23.5 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, STATE BANK OF INDIA, HDFC BANK LTD, ICICI BANK LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

Peer median ROE16.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +39% while net margin moved -90% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+39%

Margin effect-90%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 11.5% is steady
✗ Profit has declined at 47.8% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 75.6% in the latest year

Quality vs. Valuation

Company Quality

57/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

56/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

14.8x

3Y Median

7.2x

40 monthly readings · mean 9.3x · range 3.3x–36.0x

Sector Median

17.0x

median of 4 sector peers

⚠️Current valuation is approximately 107% above its 3y median of 7.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟡Against its sector it is priced broadly in line with the peer median of 17.0x.

vs. its own history

Expensive

7.2x median over 40 months · +107%

vs. sector peers

Fair

17.0x median of 4 peers · -13%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

10.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 41.0% to 49.7% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Return on equity is falling
ROE has dropped from 16.1% to 1.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 19.2% to 13.7% — often a sign of competition or overexpansion.
Short-term liquidity is tight
Current ratio of 0.96 — near-term obligations exceed near-term assets.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.1x — little room if earnings dip.
🟡Profit is decliningFinancial
Net profit is down 86% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 41.0% to 49.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The price already assumes success
The stock trades 107% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 16.1% to 1.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 9% a year✓ 11.5% CAGR
Latest reported year was 64.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 48%✓ 49.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 1.7%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Interest cover stays above 3x✗ 1.1x
How much operating profit can fall before interest stops being comfortably covered.
5Valuation vs its own median of 7.2x✗ 14.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

3 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 3 neutral · 4 weak

Market Cap

₹355 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.8x

Cheap

Cheap against the generic band

P/B Ratio

0.53x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹14.57

Profitable

Profitable on a per-share basis

ROE

1.7%

Weak

Weak capital efficiency

ROCE

13.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

4.82x

High

High leverage

Revenue Growth (YoY)

64.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-75.6%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹386 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

14.5%

Average

Average margins

Net Margin

9.3%

Average

Average bottom-line conversion

Current Ratio

0.96

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.06

Defensive

Steadier than the market

52W Range Position

32%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

219.5 / 235.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

34.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹430 Cr	₹379 Cr	₹463 Cr	₹595 Cr	+11.5%
EBITDA	₹176 Cr	₹148 Cr	₹204 Cr	₹296 Cr	+18.9%
EBITDA Margin	41.0%	39.0%	44.1%	49.7%	—
PAT (Net Profit)	₹79 Cr	₹123 Cr	₹46 Cr	₹11 Cr	-47.8%
EPS	₹47.84	₹74.58	₹27.81	₹6.79	-47.8%
ROE	16.1%	20.1%	7.0%	1.7%	—
ROCE	19.2%	10.5%	10.6%	13.7%	—
Total Debt	₹1,854 Cr	₹1,627 Cr	₹2,812 Cr	₹3,206 Cr	+20.0%
Free Cash Flow	-₹47 Cr	-₹12 Cr	-₹1,102 Cr	-₹386 Cr	—

🟢 Revenue has grown at 11.5% a year over 3 years.

🟢 EBITDA has grown at 18.9% a year over 3 years.

🟢 EBITDA Margin has risen from 41.0% to 49.7% over 3 years (+8.7 pts).

🔴 PAT (Net Profit) has shrunk at 47.8% a year over 3 years.

🔴 EPS has shrunk at 47.8% a year over 3 years.

🔴 ROE has fallen from 16.1% to 1.7% over 3 years (-14.4 pts).

🔴 ROCE has fallen from 19.2% to 13.7% over 3 years (-5.6 pts).

🔴 Total Debt has grown at 20.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,056 Cr

Total Liabilities

₹3,385 Cr

Cash & Equivalents

₹365 Cr

Operating Cash Flow

-₹375 Cr

Capex

-₹11 Cr

Shareholding (proxy)

Institutional Holding

2.2%

Insider Holding

69.0%

Corporate Actions

Ex-Dividend Date

17 Mar 2016

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
STATE BANK OF INDIA	10.3x	15.2%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%

Recent News

6 general

Muthoot Capital Services CRO Umadevi Pazhoor Unnikrishnan resigns

scanx.trade, 14 Oct

Muthoot Capital Services vs Nifty 50: Returns Compared

Univest, 08 Oct

Muthoot Capital Services Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Muthoot Capital Allots 15,000 NCDs Worth ₹150 Crore At 9.25% Interest Rate

Sahi, 30 Jun

Muthoot Finance Ltd soars 1.8%, up for third straight session

Business Standard, 06 Jul

Muthoot Capital gets BSE listing approval for ₹20 crore commercial paper

scanx.trade, 01 Oct

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality

WeakGrowth · Profitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

3 of 5 tripwires tripped — Return on equity stays above 8%; Interest cover stays above 3x; Valuation vs its own median of 7.2x · see Key things to watch ↑