Muthoot’s Q2 profit rose over 87% year-on-year (YoY) to Rs 2,345 crore in Q2, and its gold loan AUM increased by Rs 11,723 crore, registering a 10% spike.
The total income rose to Rs 6,461 crore compared to Rs 4,126 crore in the corresponding period a year ago, Muthoot Finance said in a regulatory filing. During the quarter, interest income increased to Rs 6,304 crore against Rs 4,068 crore in the second quarter of FY25.
The company’s NIM rose 51bp QoQ. Excluding recovery interest, yield improved 53bp QoQ as the company lent to the higher-yield segment. Core NII expanded 18% QoQ, led by higher yield and a 10bp decline in cost of funding.
Following the results, domestic brokerage firm Nuvama raised the target price from Rs 2,993 to Rs 4,000, citing strong and better-than-peers earnings and Muthoot’s ability to shield loan yields from rising competition.
“The stock trades at 3.8x/3x FY26E/27E BV. We are raising FY26E/27E EPS by 23%/28%. We revise TP to INR4000/4.5x FY26E BV from INR2,993. Demand for gold loans from low-income borrowers shall stay strong,” Nuvama said.Also read: Goldman Sachs says Reliance Industries, Titan Company and 12 other stocks to lead next market rally. Check full list
At an analyst call, the company management significantly raised AUM growth guidance for FY26 from 15% to 30–35%, citing strong momentum and franchise tailwinds (higher gold prices and favourable regulatory clarifications). It also reiterated its intent to scale up the non-gold portfolio prudently.
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