My anti thesis would be
- I am not convinced on either banks will take away market share or muthoot/manappuram will take back what is actually theirs. I am confused more than ever. So staying away from both(I do have position in IIFL, which is growing gold loan book whereas muthoot and manapuram not growing their book)
- I am not worried about SBI/HDFC ramping up gold loans, but i am worried about equitas/Ujjivan/CSB ramping up gold loans
- Muthoot/Manappuram’s margin are too juicy for competitors to start a price war. We call valuation is cheap and this is purely based on P/E. If price war starts, muthoot choose to lower their yield to 16-17%, then suddenly PAT drops, RoE drops, P/E increases and the whole concept of cheap is go for a toss.
- RBI’s mercy to open new branches
- Average other verticals like homefin, MFIN,…
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