Muthoot Finance upgraded its FY26 gold loan growth guidance to 30-35% (from 15% earlier), driven by favorable regulatory changes, higher gold prices, and rising demand amid tightening in unsecured lending segments.
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Muthoot Finance Ltd. delivered a healthy all-round beat in the quarter, even after adjusting for the one-offs in interest income. Gold loan growth remained strong, while asset quality improved on the back of recoveries from the NPA pool.
Net interest margins and spreads also expanded during the quarter, driven by higher yields and a decline in CoF.
With a favorable demand outlook for gold loans, driven by the limited availability of unsecured credit, the company is well-positioned to maintain its healthy loan growth momentum. Reiterate our Neutral rating with a revised target price of Rs 3,800 (based on 3.2x Sep'27E book value per share).
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