The two stocks recommended by SMC Global Securities’ Research Team this week are Muthoot Finance and Deepak Nitrite. These two stocks have shown great potential with positive financial estimates for the next two financial years. So, let’s go through the details of the two stock recommendations for the period between January 13, 2025 and January 17, 2025.
Muthoot Finance Limited
Muthoot Finance share price is ₹2,133.25 (as on January 10, 2025) and its target price is set at ₹2,742 with an upside potential of 29%.

Muthoot Finance Limited: Investment Rationale
-
- Muthoot Finance is NBFC engaged in the business of providing gold loans. The company predominately operates in Southern India and is India’s largest gold financing company.
- Through its various subsidiaries, it is also engaged in the business of Affordable Housing Finance, Microfinance, Gold Loans, Vehicle Finance, Insurance Broking, and mutual funds. It operates with 7,097 branches and has consolidated Loan Assets Under Management (AUM) of ₹1,04,149.2 crores. Gold loans account for 86% of the total AUM.
WHY SMC
- 20 Lac+ unique clients
- 33+ Years of Serving
- Advance Technical Analysis
- Free Demat Account
- At the end of Q2 FY2025, its Standalone Loan Assets under Management reached a historic high of ₹90,197 crores, driven by a robust 28% YoY growth in its core gold loan portfolio.
- During H1 FY2025, it reported the highest-ever gold loan disbursements to new customers of ₹10,687 crores to 9.66 lakh customers. According to the management, it has the highest average Gold Loan AUM per branch of ₹17.75 crores among its peers. The company has revised its earlier guidance for FY25 on gold loan growth from 15% to 25%.
- Its non-gold loan portfolio is also progressing, with notable growth across microfinance, personal loans, and home loans, strengthening its position as a diversified financial services conglomerate.
- During H1 FY2025, Home loan AUM and Microfinance Loan AUM increased by 51% YoY and 22% YoY respectively. Its insurance business generated a total premium collection amounting to ₹321 crores in H1 FY25.
- Recently, it has raised approx. ₹6,440.96 crores (USD 750 million) through Global issuance USD denominated Bonds which is a testament to its resilient performance, commitment to its customers, and financial credibility in global markets. This capital will fuel its growth initiatives across diverse segments, positioning it to serve a broader range of customers and expand its digital reach.
- It is enhancing its digital platform to enhance customer experience. It has intensified its omnichannel strategy to meet the evolving preferences of the younger generation including millennials and Gen Z who view gold loans as a strategic financial tool.
- Its digital platforms now integrate seamlessly with its physical branches, providing an experience that combines the convenience of online access with the personalized support of branch managers.
The promoter’s shareholding is highest in Muthoot Finance at 73.35%.
Muthoot Finance Limited: Valuation
The company’s strong focus on gold loans remains, with home loans identified as the second key growth area. The management is confident about the potential of non-gold loans, particularly personal and home loans, to contribute to overall growth.
Continued marketing efforts and improved customer acquisition strategies are in place to maintain growth momentum. Thus, it is expected that the stock may see a price target of ₹2,742 in 8 to 10 months’ time frame on current P/BV of 3.33x and FY26 BVPS of ₹823.41.
Muthoot Finance Limited: Risk
- Deterioration in Asset Quality
- Economic Slowdown
Deepak Nitrite Limited
Deepak Nitrite share price is ₹2,413.55 (as on January 10, 2025) and its target price is set at ₹3,147 with an upside potential of 30%.

Deepak Nitrite Limited: Investment Rationale
- Deepak Nitrite produces a spectrum of chemicals, including agrochemicals, colorants, rubber, pharmaceuticals, specialty, and fine chemicals. The company manufactures chemical intermediates to serve the domestic and international markets with high-quality products made in a responsible and sustainable manner.
- According to the management of the company, it has demonstrated a very resilient performance in challenging times. The phenolics segment, which contributed around 55% of total revenue, has maintained an EBITDA margin of 19% during Q2FY25.
- Business sentiment in the quarter remained muted broadly due to geopolitical uncertainties linked with high interest, limited operating rates in Europe and China, low-priced destocking, and volatile crude oil prices.
- However, it continues to stand resolute with its strategy of ‘Make in India, Make for the World.’ Several projects are nearing completion over the next 6 months, including nitric acid, new nitration and hydrogenation blocks, photochlorination, acetophenone, cumene hydroperoxide, MIBK and MIBC, and a new Research and Development center.
- In Q2 FY25, on a consolidated basis, revenue was up 14% to ₹2,053 crores as compared to ₹1,795 crores in Q2 FY24. EBITDA at ₹319 crores was flat on a year-on-year basis. Margins moderated at 16% on the base of higher raw material costs and other utilities along with lower recovery for a few products.
-
- PBT and PAT stood at ₹264 crores and ₹194 crores, respectively. Profitability was aligned with the operational performance of the Company. It continues to maintain zero debt position on a net basis with a net worth of ₹5,125 crores on a consolidated basis.
- It has recently commissioned projects including a multifuel boiler, SAC unit, advanced process control systems, and high-pressure fluorination assets which will add accretive value going ahead. New investment announcements will significantly enhance the company’s business model and chemistry platforms over the next three years and pave the road for new partnerships and opportunities.
WHY SMC
- 20 Lac+ unique clients
- 33+ Years of Serving
- Advance Technical Analysis
- Free Demat Account
- On the development front, it has signed an agreement to acquire the assets and license the technology from Messrs. Trinseo PLC to manufacture 1,65,000 tons of Polycarbonate (PC) resins. This project which entails a commitment of ₹5,000 crore is expected to be operational in the next 3 years.
- Moreover, it has already secured a long-term agreement for the offtake of 2,50,000 tons of propylene from Petronet LNG. This would be the first plant to make advanced polymers such as Polycarbonate in the country.
In the overall shareholding of Deepak Nitrite, promoters have the highest shareholding of 49.24%.
Deepak Nitrite Limited: Valuation
The company is well positioned to capitalize on the ‘Make in India for the World’ initiative with its formidable manufacturing infrastructure and extensive process proficiency in the realm of chemistry.
The growth strategy envisages a foray into more value-accretive downstream products of existing core products through forward integration.
Further, backward integration is also envisaged which will enhance raw material availability and security while opening up new avenues for growth and value creation. Thus, it is expected that the stock may see a price target of ₹3,147 in 8 to 10 months’ time frame on an expected P/BVx of 6.60x and FY26 BVPS of ₹476.85E.
Deepak Nitrite Limited: Risk
- Intense competition
- Economic slowdown
Conclusion
These two stocks, one from the finance sector and the other from the chemicals sector can reach their target price in the coming 8 to 10 months. But it is always better if you do your analysis before investing and set a stop loss target. To keep track of your invested stocks, open demat account with SMC Global Securities and invest on the go.
Reference:
https://www.smctradeonline.com/research/wise-money/241
Author: All Content is verified by SMC Global Securities.
WHY SMC
- 20 Lac+ unique clients
- 33+ Years of Serving
- Advance Technical Analysis
- Free Demat Account