The share price of Muthoot Finance kicked off Thursday’s trade on a strong note. The share price of the company surged nearly 10% to new 52-week highs today after the gold loan giant posted its best-ever quarterly numbers for the June 2025 quarter (Q1 FY26).
The rally came as the company reported a 90% year-on-year jump in standalone profit after tax (PAT) to Rs 2,406 crore.
Muthoot Finance Q1FY26
From loan book expansion to gold holdings, Muthoot Finance broke several of its own records in Q1. Standalone loan assets under management (AUM) climbed 42% YoY to Rs 1,20,031 crore, while gold loan AUM surged 40% to Rs 1,13,194 crore. The company also recorded its highest-ever quantity of gold held as security – 209 tonnes.
Consolidated loan AUM touched Rs 1,33,938 crore, up 37% YoY, and consolidated PAT came in at Rs 1,974 crore, a 65% jump from last year. Average gold loan AUM per branch rose to Rs 23.21 crore, while gold loan disbursement to new customers hit Rs 6,355 crore across over 4.45 lakh borrowers.
Motilal Oswal on Muthoot Finance
Motilal Oswal reiterated its Neutral rating, saying valuations were already stretched at 2.4x FY27E price-to-book value.
“We believe that the positives are already factored into its valuations…which will remain vulnerable to any volatility in gold prices,” the report cautioned. Its target price remains unchanged at Rs 2,790.
According to Motilal Oswal, Muthoot Finance delivered “a healthy all-round performance during the quarter, even after considering the one-offs in interest income.” The brokerage noted that gold loan growth remained strong, with asset quality improving due to recoveries from non-performing assets.
The firm expects “a standalone AUM CAGR of ~20% over FY25-27E,” translating into a PAT CAGR of around 28%. It models a return on assets (RoA) of 5.2% and return on equity (RoE) of 22% for FY27.
Nuvama on Muthoot Finance
In contrast, Nuvama was more upbeat, giving Muthoot Finance a Buy rating with a revised target price of Rs 2,993.
The brokerage described Q1 FY26 as “a strong quarter unlike peers, with an all-round beat” driven by 42% YoY AUM growth, a near 90-basis-point improvement in net interest margins, and a sharp drop in credit costs.
Recoveries of Rs 3.5 billion, including Rs 1 billion from asset reconstruction companies, added a temporary boost to yields. Even excluding these, “yield was stable versus a decrease for peers,” the brokerage pointed out.
The brokerage in its report also highlighted that both Muthoot Money and Belstar, its subsidiaries, are ramping up gold lending, while non-gold AUM is expanding faster in percentage terms. “With strong earnings that are substantially better than peers, we reiterate ‘BUY’,” the report said.
