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Motilal Oswal Report
Muthoot Finance Ltd. reported a strong Q1 FY27 with consolidated assets under management rising 43% YoY to Rs 1.92 trillion, while standalone gold loan AUM grew 44% YoY to Rs 1.63 trillion, driven by healthy customer additions and strong demand.
Standalone PAT increased 25% YoY to Rs 2,550 crore, with RoA/RoE remaining strong at 6.1%/26.6%, despite gold loan yields moderating to 17.9% from 20.8% in Q4 FY26.
Management attributed the yield decline to lower lending rates, normalisation of one-off recoveries and loan renewals, and transition to the new RBI gold loan regulations rather than any deterioration in business quality.
Asset quality remained robust with credit losses of just 0.05% and CRAR at 20.3%.
IDBI Capital has maintained its Buy rating with a target price of Rs 3,600, valuing the company at 2.5x FY28E P/B.
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