Shares of Muthoot Finance today jumped 8 per cent and were heading towards their biggest single day gain since January 2015.
The stock is the top gainer among BSE large-caps.
Motilal Oswal has initiated coverage with a “buy’’ rating with a target of Rs 234 per share.
It says gold loan penetration levels remain low and the addressable market is very large; niche expertise and single product focus will be the company’s growth enablers.
It adds current valuations of 6.9x FY17 P/E and 1x FY17 BV are attractive.