Target: ₹3,478
CMP: ₹3,332.95
Muthoot Finance Ltd., India’s largest NBFC in gold loans by loan portfolio, operates over 7,541 branches nationwide. Besides gold loans, it offers various loans, insurance, money transfer services, and gold coin sales through its subsidiaries.
Gold loan yield stood at 20.34 per cent in Q3FY26, supported by one-off NPA recoveries. On a normalizsd basis, yields are expected to remain in the 18.5-19 per cent range. Meanwhile, management has raised FY26 gold loan growth guidance to 45 per cent.
We maintain a cautious outlook on Muthoot Finance despite its strong Q3FY26 performance, where results exceeded estimates, supported by record profit growth and continued AUM expansion. However, the stock has recently faced pressure amid volatility in gold prices and a slight decline in gold collateral tonnage.
Additionally, the stock is currently trading at a historical premium to its long-term average, indicating that the recent price correction has already factored in much of the quarterly positives. Nevertheless, improving visibility in loan book growth and stabilizing asset quality remain supportive. Considering these factors, we upgrade our rating to Hold with a revised target price of ₹3,478, based on 2.4x FY28E BVPS.
Published on March 13, 2026