Muthoot Finance Shares Soar 11% After Posting Robust Q1FY26 Earnings

On Thursday, the Muthoot Finance shares soared by 11.51 percent touching a day’s high price and an all-time high price of Rs 2,799 on NSE after it delivered an exceptional consolidated performance in Q1FY26, setting record highs across key financial and operational metrics. The company’s consolidated profit after tax (PAT) surged 65 percent year-on-year (YoY) to Rs 1,974 crore, compared to Rs 1,196 crore in the same quarter last year. Sequentially, PAT rose by a robust 37 percent, reflecting the strong operations.

Total income grew 44 percent YoY to Rs 6,485 crore, due to continuous demand for gold-backed credit. This revenue boost was supported by a 37 percent YoY jump in consolidated loan assets under management (AUM), reaching Rs 1,33,938 crore, while standalone AUM soared 42 percent to Rs 1,20,031 crore. The gold loan segment continued to be the biggest driver for Muthoot, with AUM hitting Rs 1,13,194 crore, a 40 percent YoY rise. Average gold loan AUM per branch also reached a record Rs 23.21 crore, indicating higher disbursements and improved customer engagement.

Operationally, the company disbursed Rs 6,355 crore in gold loans to 4,45,481 new customers, underscoring its leadership in financial inclusion. The quantity of gold held as collateral in its vaults climbed to 209 tonnes, aided by rising gold prices and greater customer acceptance of gold loans as a reliable credit source. Other subsidiaries like Muthoot Homefin and Muthoot Money delivered impressive growth, with AUMs expanding 41 percent and 202 percent YoY, respectively.

The period also showed improvements in asset quality. Muthoot’s gross stage III assets as a percentage of total loan assets improved to 2.58 percent from 3.41 percent in the preceding quarter, while net stage III assets also declined. The company’s standalone net interest income (NII) grew 50.6 percent YoY to Rs 3,473 crore, while net interest margin (NIM) increased to 12.15 percent from 11.51 percent last year. The company expanded its branch network with 22 new openings in the quarter, currently standing at 7,413 branches.

In terms of corporate actions, the Board of Directors approved additional equity infusions of Rs 500 crore into Muthoot Money Limited and Rs 200 crore into Muthoot Homefin (India) Limited to capitalise further on growth and strengthen subsidiary balance sheets.

Brokerages responded favourably to the results. As per various sources, Morgan Stanley upgraded Muthoot Finance to “overweight” from “equalweight”, raising its price target to Rs 2,920. Jefferies lifted its target to Rs 2,950, citing a strong RoE of 21% and PAT CAGR of 23% from FY26 to FY28, robust gold loan tailwinds, and healthy profit growth prospects. Motilal Oswal, while acknowledging the positives, retained a “neutral” stance with a target of Rs 2,790, implying limited further upside as strong operating metrics are already priced in. The outlook of most of the brokerage houses cited Muthoot’s superior asset quality, diversification, and sectoral leadership.