Muthoot Microfin Limited Fair Value
MUTHOOTMF · Financial Services · Current price ₹174.76
Is Muthoot Microfin Limited undervalued?
We estimate the fair value of Muthoot Microfin Limited at ₹173 per share, against a market price of ₹196. That puts the share price about -12.0% above our estimate, at medium confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Residual income (excess return on book) (₹149), Relative P/B (₹222). Each is weighted by how well its inputs held up for this company. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Muthoot Microfin Limited spans ₹149 to ₹222. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
How we got this fair value
Every number below is part of the same estimate for Muthoot Microfin Limited. Nothing here is a target price or a forecast of where the share price will go.
Workable, with real gaps. Weigh it alongside your own view rather than on its own.
Estimate range ₹149 – ₹222
Why this method for this business
Residual income and relative P/B are the most appropriate models for a microfinance institution, as they reflect the capital-intensive nature of the business and the importance of book value and peer comparisons.
The models behind the number
Each method is weighted by how well its inputs held up for this company.
Book value plus the present value of returns earned above the 10.6% cost of equity
- justified_pb is rejected due to its low implied value relative to current price
- DCF is not used as it is not suitable for a capital-intensive NBFC
What was missing
- Lack of forward EBITDA estimates
- Limited peer data for precise P/B comparisons
What drives it
8 inputs, grouped by how strong each claim is
- ROE (normalized)
- 6.2%
- Book value / share
- 167.8 ₹
- Peer-median P/B
- 1.32×
- Peers used
- 417
- Book value / share
- 167.77 ₹/share
computed
reported
peer-median
peer-median
computed
- Cost of equity
- 10.6%
building-block
- Moat
- None
- Excess-return horizon
- 3 yrs
computed
computed
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Muthoot Microfin Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 15 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on Muthoot Microfin Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.