Muthoot Finance's Shares Climb 10% Following Impressive Q1 Performance and Positive Analyst Appraisals
Muthoot Finance, a leading player in the gold financing sector, continues to impress investors with its robust and stable performance. The company's latest Q1 FY26 results have cemented its position among the top entities in the industry, leading to positive analyst upgrades and strong earnings.
Impressive Financial Performance
Muthoot Finance reported a significant 65% year-on-year increase in its consolidated net profit for the June quarter of 2025, reaching approximately Rs. 1.974–2.046 crore [1][3]. The company's Assets Under Management (AUM) also saw a record high, with a 37% year-on-year increase, reaching Rs. 1.33 lakh crore [1][5]. Gold loans alone grew by 40% year-on-year [3].
The strong growth was further supported by improved net interest margins, which expanded by 88 basis points, boosting profitability [1]. This expansion was aided by recoveries from non-performing assets and asset reconstruction companies, as well as efficient cost management and a significant reduction in credit costs [1].
Analysts' Optimism
Following Muthoot Finance's impressive Q1 performance, several leading brokerages have upgraded their price targets for the company. Analysts from Jefferies and Nuvama have upgraded the stock with target prices raised to around ₹2,950–₹2,993, expecting a 23% profit Compound Annual Growth Rate (CAGR) and return on equity exceeding 21% over FY26–28 [1][5].
Morgan Stanley has also upgraded its rating for Muthoot Finance from Equalweight to Overweight and raised the price target to Rs. 2,920 [6]. Motilal Oswal, on the other hand, maintains a "Neutral" rating for Muthoot Finance with a target price of Rs. 2,790 [7].
Stock Price Performance
Muthoot Finance shares have been on a surge, hitting record highs near ₹2,800 [2]. Some analysts predict a further rise to ₹3,500 within a year [2]. As of Thursday, Muthoot Finance shares traded at Rs. 2,760, up by 10% and hitting a new 52-week high of Rs. 2,793.65 [4].
Outlook
With its strong recovery, improved profitability, and positive analyst sentiment, Muthoot Finance appears well-positioned for continued growth in its gold loan business and financial services. The company is expected to maintain its bullish momentum, with analysts projecting a solid upside in the coming months. The recovery rates from non-performing loans (NPLs) and asset reconstruction companies (ARCs) for Muthoot Finance remain strong and at high levels [1].
In a nutshell, Muthoot Finance's future growth prospects are very strong, supported by its robust Q1 earnings, favorable sector dynamics, and positive analyst sentiment reflecting both robust fundamentals and attractive valuations [1][2][5].
[1] Livemint.com [2] Economic Times [3] Moneycontrol.com [4] BloombergQuint.com [5] BusinessStandard.com [6] Moneycontrol.com [7] Motilal Oswal Research [8] Jefferies Research [9] Nuvama Research
- The strong performance of Muthoot Finance in personal-finance and business sectors, as demonstrated by their Q1 FY26 results, has led to analysts investing in the company, with Jefferies and Nuvama predicting a 23% profit Compound Annual Growth Rate (CAGR) and return on equity exceeding 21% over FY26–28.
- The impressive financial performance of Muthoot Finance, with a 65% year-on-year increase in net profit and 37% year-on-year increase in Assets Under Management (AUM), has been supported by technology-driven aspects such as improved net interest margins, recoveries from non-performing assets, and efficient cost management.
