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Muthoot Finance hits 52-week low, then rebounds 9% on profit jump and higher gold loan target
Shares of the Kochi-based gold lender fell to ₹2,305 in early trade before recovering sharply, as investors weighed a 27% rise in quarterly profit and a raised growth forecast against worries over loan quality.
Key points
- Muthoot Finance fell to a 52-week low of ₹2,305, then rose to ₹2,508.
- September-quarter standalone profit rose 27% to ₹2,977 crore.
- The company raised its FY27 gold loan growth guidance to 25% from 15%.
Shares of Muthoot Finance swung sharply on Monday morning, sliding to a 52-week low soon after the open and then bouncing nearly 9%, as the market digested the gold lender’s September-quarter results.
The stock fell to ₹2,305 in early trade on the National Stock Exchange, against Friday’s close of ₹2,409, before climbing to a day’s high of ₹2,508, about 8.8% above the low. At 9:55 am it was up 2.6% at ₹2,471. Even after the bounce, the shares were nearly 40% below their 52-week high of ₹4,149.50, reached in January.
Strong numbers, worried investors
The results, announced over the weekend, were strong. Standalone net profit rose 27% to ₹2,977 crore from ₹2,345 crore a year earlier, total income rose 37% to ₹8,842 crore and net interest income grew 34% to ₹5,364 crore. Consolidated gold loan assets under management grew 46% to ₹1.93 lakh crore.
“We are also revising our gold loan growth guidance for FY27 upward by an additional 10%,” the company’s management said, taking the target to 25% from 15%. Muthoot added 262 branches in the first half and expects a similar number in the second.
Brokerages were split. Equirus Securities upgraded the stock to “Add” from “Reduce” with a target of ₹2,920, citing valuation comfort after a steep fall over six months, though it raised its credit cost estimate and flagged rising delinquencies. Nuvama kept a “Hold” rating and cut its target to ₹2,675 from ₹3,100, naming asset quality as the thing to watch.