- Shares of Muthoot Finance dropped over 12% following Q3 earnings announcement
- Net profit rose 94.9% YoY to Rs 2,656 crore, with NII up 64% YoY to Rs 4,467 crore
- Stock entered oversold territory with RSI at 26.83 and traded below average volume
Shares of Muthoot Finance Ltd. have fallen over 12% to trade at Rs 3597.70. That compares to a 1.03% decline in the benchmark NSE Nifty 50. Shares prices of Muthoot Finance have fallen because of profit taking and concerns that earnings momentum may not sustain.
The decline comes after the company announced their Q3 earnings on Thursday. Muthoot Finance's net profit grew 94.9% year-over-year to Rs 2,656 crore, up from Rs 1,363 crore, while the company's net interest income (NII) increased 64% year-over-year to Rs 4,467 crore, compared to Rs 2,721 crore in the same period last year.
Speaking to NDTV Profit, George Alexander Muthoot, Managing Director of Muthoot Finance, expressed confidence in the company's performance and said, "The first three quarters we have grown above 36%, which is much more than the 33% growth last year. We have already beaten last year and there is one more quarter to go and we see demand coming from there."
Muthoot Finance Ltd. Share Price Today
Muthoot Finance Ltd. Share Price Today
Photo Credit: (Photo: NDTV Profit)
The scrip fell as much as 12.05% with the stock trading at Rs 3597.70 apiece intraday. The total traded volume during the session stood at 0.64 times the 30-day average. The relative strength index — a momentum indicator — was at 26.83, suggesting that the stock has entered the oversold territory.
Of 25 analysts tracking the stock, 12 have a buy rating, eight have a hold rating, and five recommend 'a sell' rating, according to Bloomberg data. The average 12-month consensus price target stands at Rs 4018.42, implying a potential upside of 12.0%.
Brokerage firm Jefferies has reiterated its 'buy' rating on Muthoot Finance and raised its target price from Rs 4,500 to Rs 4,750, citing sustained earnings momentum and supportive sector dynamics.
Jefferies's Note
Brokerage firm Jefferies maintained the 'buy' rating on Muthoot Finance Ltd. while hiking the target price to Rs 4,750 from Rs 4,500. The non-banking finance company reported a profit beat in Q3, with earnings buoyed primarily by interest income write-backs, contributing to stronger-than-expected PAT growth.
On the operational front, standalone Assets Under Management (AUM) surged 51% year-on-year, though it came in slightly below estimates. The brokerage attributed the miss to a dip in gold tonnage quarter-on-quarter and lower loan-to-value (LTV) ratios, which moderated disbursement volumes.
Despite a sequential decline in core net interest margins, the quarter saw positive surprises on the cost front, with operating expenses-to-AUM and credit costs performing better than anticipated.
Jefferies noted that robust gold prices, a comfortable LTV buffer, and the recent easing of branch expansion norms should underpin healthy AUM growth in the coming quarters. The brokerage expects steady NIMs, coupled with continued efficiency gains, to support strong profitability.
Looking ahead, Jefferies forecasts a 17% EPS CAGR and return on equity above 25% over FY26–28, reinforcing its bullish outlook on the gold loan major.
ALSO READ: Stock Market News Live: Nifty, Sensex Down 1% Amid; Nifty IT Marks Worst Year Start Since 2008
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.