The shares of Muthoot Finance crashed more than 8% on Friday, even after the gold loan provider reported a 105% year-on-year (YoY) surge in standalone net profit to Rs 3,086 crore for the January-March quarter of the financial year 2026, from Rs 1,508 crore in the same period last year.
The firm’s revenue from operations meanwhile surged more than 68.5% to nearly Rs 8,180 crore for the quarter under review, as against Rs 4,854 crore reported in the corresponding quarter of the previous financial year.
For the entire financial year 2026 which ended on March 31 this year, Muthoot Finance reported a 95% YoY increase to its highest-ever standalone profit after tax of Rs 10,134 crore. Gold loan assets under management (AUM) meanwhile rose 50% YoY to Rs 1.54 lakh crore, the highest-ever.
Jefferies on Muthoot Finance
Jefferies maintained its ‘Buy’ rating on the shares of Muthoot Finance, but reduced its target price to Rs 4,350 apiece. This implies an upside potential of more than 23% from the stock’s previous closing price of Rs 3,531 apiece on NSE.
The international brokerage highlighted that the company's Q4 net profit beat its estimate, led by stronger NII. Standalone AUM grew 50% YoY (inline) on higher gold prices and LTV, it added. However, Jefferies noted that customers fell 2% QoQ reflecting some churn in lower ticket customers.
“We lift FY27-28e EPS by 6-8% factoring stronger growth, higher margins and lower opex. We expect 15% EPS CAGR (despite strong base) and ROE of 25-27% over FY26-28e. At 2.9x FY27e BV (avg 2.5x) and 12x FY27e PE, valuation seems reasonable given strong ROE and scope for EPS upgrades. We trim our target multiple factoring range bound gold prices. Maintain Buy with PT of Rs4350 (Rs4750) based on 2.7x June 28e BV (3.5x March 28e),” it said.
Morgan Stanley on Muthoot Finance
Morgan Stanley held an ‘Overweight’ call on the shares of Muthoot Finance, with a target price of Rs 4,330 apiece, implying an upside potential of 22% from the stock’s previous closing price.
The international brokerage raised its earnings per share estimates for FY27 and FY28 by 6% and 4%, respectively, driven by improved margin assumptions. Net interest margin (NIM) estimates have also been revised upward by 63 basis points for FY27 and 55 basis points for FY28, reflecting better yield expectations.
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While gold loan growth has lagged the rise in gold prices and trailed some peers, the brokerage believes there is significant catch-up potential.
Motilal Oswal on Muthoot Finance
Motilal Oswal maintained a ‘Neutral’ rating on the shares of Muthoot Finance, but raised its target price to Rs 3,720 apiece. This implies an upside potential of 5% from the stock’s previous closing price.
The domestic brokerage raised its earnings estimates, stating that the company has benefited from the tailwinds of a sharp rise in gold prices, and an improvement in gold loan demand due to the earlier poor availability of unsecured credit. “With its ability to deliver industry-leading gold loan growth and best-in-class profitability, Muthoot Finance is one of the best franchises for gold loans in the country. However, we see risks of market share losses for Muthoot Finance given the high competitive intensity and aggressive foray of multiple deep-pocketed AAA (or AA+ rated) NBFC franchises into gold loans,” it said.
Muthoot Finance share price
Muthoot Finance crashed more than 8% to trade at Rs 3,239 on NSE on Friday. The shares have declined more than 8% in one month, and 14% in 2026 so far. In the longer term, the shares gained over 57% in one year, over 209% in three years and over 183% in five years.
The company currently has a market capitalisation of around Rs 1.33 lakh crore. Notably, the fall in Muthoot Finance’s share price on Friday also comes amid a drop in gold prices.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
