Muthoot Finance Set for Price Appreciation to Rs 3478: Geojit Financial Services

Muthoot Finance Ltd. Q3FY26 Performance and Outlook

Key Highlights

• Muthoot Finance Ltd., India's largest NBFC in gold loans by loan portfolio, operates over 7,541 branches nationwide.
• In Q3FY26, the company's consolidated loan Asset Under Management (AUM) rose 48% YoY to Rs. 1,64,720cr, led by 51% YoY growth in standalone gold loans.
• Gold loans now comprise 89% of total AUM at Rs. 1,47,552cr, with a yield of 20.34% in Q3FY26, supported by one-off NPA recoveries.

Financial Performance

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• Standalone profit rose sharply by 91% YoY to Rs. 7,048cr in 9MFY26, driven by improved operational efficiency and strong margins.
• Asset quality strengthened, with the Stage III ratio in the gold loan portfolio declining to 1.58% in Q3FY26 from 4.22% a year earlier.
• The company holds 205 tonnes of gold as collateral, with an average portfolio Loan-to-Value (LTV) of 57% and a comfortable margin of safety of about 43%.

Outlook and Recommendation

• We upgrade our rating to Hold with a revised target price of Rs. 3,478, based on 2.4x FY28E Book Value Per Share (BVPS).
• The company's improving visibility in loan book growth and stabilizing asset quality remain supportive of its financial performance.