Shares of Muthoot Finance on Thursday hit a fresh high before settling with 10 per cent gains following a 65 per cent year-on-year surge in its consolidated profit after tax for three months ended June 2025.
The stock ended nearly 10 per cent higher at ₹2,757.55 on the BSE, hitting a fresh high of ₹2,799.
The gold loan NBFC reported a 90 per cent growth in profit after tax at ₹2,406 crore in Q1 FY26 as against ₹1,079crore in Q1 FY25.
The company has benefited from the tailwinds of sharp uptick in gold prices, improved gold loan demand due to the industry-wide rationing in unsecured credit.
The non-gold business currently accounts for 13–14 per cent of the portfolio, and the company targets to maintain this share in the 15–20 per cent range going forward.
Brokerages have broadly been positive on the stock, increasing target prices, taking cues of strong gold loan growth and asset quality improvement on the back of recoveries from the NPA pool. Global brokerage Morgan Stanley upgraded the stock to overweight at an increased target price of ₹2,920. Jefferies maintained buy at a raised target price of ₹2,950.
Nitin Jain, Sr. Research Analyst at Bonanza, emphasised that Muthoot Finance’s robust fundamentals place it on firm ground for continued growth. Jain advised investors remain attentive to regulatory changes and gold price trends, but the quarter marks clear evidence of the company’s resilience and expansion in the NBFC gold loan sector.
Domestic brokerage Motilal Oswal has maintained neutral rating at unchanged target price of ₹2,790. It said that the NBFC delivered healthy performance, even after considering the one-offs in interest income. “ With a favourable demand outlook for gold loans driven by the limited availability of unsecured credit, the company is well-positioned to maintain its healthy loan growth momentum,” it said.
Motilal added that it believes that the valuations are rich for the deep cyclicality in its gold loan growth, which will remain vulnerable to any volatility in gold prices.
Muthoot Finance board had approved an additional equity infusion of ₹200 Crores in Muthoot Homefin (India), and ₹500 Crore in Muthoot Money, wholly-owned subsidiaries of the company.
Published on August 14, 2025
