Brokerages lifted their targets on the stock after earnings, citing strong profitability, robust loan growth and improving asset quality.
Muthoot Finance shares rose over 10% on Thursday after the company reported strong first-quarter (Q1) results and received multiple brokerage upgrades.
Q1 Earnings Review
Muthoot Finance’s consolidated loan assets under management (AUM) stood at ₹1,33,938 crore, up 37% year-on-year and 10% quarter-on-quarter. Standalone loan AUM climbed 42% from a year earlier and 10% from the previous quarter to ₹1,20,031 crore.
Consolidated profit after tax came in at ₹1,974 crore, up 65% year-on-year and 37% quarter-on-quarter, while standalone profit surged 90% from last year and 36% from the prior quarter to ₹2,046 crore.
Gold loan AUM rose 40% to ₹1,13,194 crore, with the average loan per branch increasing 39% to ₹23.21 crore.
The company operated 4,877 branches, serving 105 lakh loan accounts, a 14% increase year-on-year.
Subsidiary Support Outperformance
SEBI-registered analyst Saurabh Sahu noted that Muthoot’s subsidiaries delivered solid gains, with Muthoot Homefin’s AUM rising 41% year-on-year to ₹3,096 crore, Muthoot Money jumping 202% to ₹5,000 crore and up 28% from the prior quarter, and Asia Asset Finance in Sri Lanka growing 50% from a year earlier.
He added that with strong capital adequacy, a market cap above ₹1 trillion, and support from RBI rate cuts, Muthoot Finance is well placed to sustain growth in India’s expanding credit market.
Brokerage Upgrades Rush In
Morgan Stanley upgraded Muthoot Finance to ‘overweight’ from ‘equalweight’ after the results, raising its price target to ₹2,920 from ₹2,880, implying a potential upside of 16%. It cited group-leading RoE and EPS growth, likely consensus upgrades versus cuts among peers, and negligible asset quality risk even with a potential rise in bad loans.
Jefferies raised its price target to ₹2,950 from ₹2,660, implying a potential upside of over 17%. It cited tailwinds in gold prices and headroom to lift LTV as supportive factors for healthy loan growth, adding that the stock remains a defensive play amid broader market stress.
Jefferies projects a net profit CAGR of 23% and RoE of 21% for FY26–FY28.
Motilal Oswal maintained a ‘neutral’ rating with a price target of ₹2,790, implying an upside of 11%. It said the favourable gold loan outlook positions the company well for continued growth, but noted that at 2.4 times FY27 price-to-book, the positives are largely priced in.
Asset quality strengthened, with Gross Stage 3 assets easing to 2.58% from 3.41% and Net Stage 3 assets improving to 2.1% from 2.79%.
The board also cleared plans to inject up to ₹500 crore into Muthoot Money and ₹200 crore into Muthoot Homefin.
What Is The Retail Mood?
On Stocktwits, retail sentiment was ‘bullish’ amid ‘high’ message volume.
Muthoot Finance’s stock has risen 24.8% so far in 2025.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<