Synopsis:
Muthoot Finance reported strong Q1FY26 results, with a 65% YoY increase in net profit and record loan AUM. Jefferies raised its target price to Rs. 2,950 and maintained a Buy rating.
A Large-cap NBFC company is in the spotlight today after declaring financial results for Q1FY26, with a 65 percent jump in Net Profit yearly. Read the full article below for detailed insights into its performance and analyst views.
With a market capitalization of Rs. 1,10,545 crore, the shares of Muthoot Finance Limited were trading at Rs. 2,760, up by 10 percent from its previous closing price of Rs. 2,509.90. The stock has reached a high of Rs. 2800 in today’s trading session
Q1FY26 Results
Muthoot Finance Ltd reported Rs. 6,450.13 crore in consolidated revenue for the first quarter of FY26, a 43.58 percent increase over the Rs. 4,492.47 crore for the same period in FY25. However, it also increased by 14.10 percent as compared to Rs. 5,652.94 crore in Q4 FY25.
The consolidated net profit for the first quarter of FY26 was Rs. 1974.25 crore, which was 36.73 percent higher than the Rs. 1443.93 crore reported in the previous quarter and 65.12 percent higher year over year than the Rs. 1195.66 crore in Q1 FY25.
Profit growth was also reflected in earnings per share (EPS), which increased to approximately Rs. 50.22 in Q1 FY26 from Rs. 36.81 in Q4 FY25 and Rs. 28.99 in Q1 FY25.
For the quarter ended June 30, 2025, the company reported its highest-ever consolidated loan AUM at Rs. 1,33,938 crore, up 37 percent YoY, and gold loan AUM at Rs. 1,13,194 crore, up 40 percent YoY. Gold loan disbursements to new customers stood at Rs. 6,355 crore to 4,45,481 customers. Gold holdings in lockers hit 209 tonnes. The company crossed a market capitalisation of Rs. 1 trillion, opened 22 new branches in Q1 FY26.
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Acquisitions
Muthoot Finance Limited will invest up to Rs. 200 crore in its subsidiary, Muthoot Homefin (India) Limited, a housing finance company, to improve its capital adequacy ratio. The acquisition, which is a related party transaction because some directors serve on both boards, will be completed within six months and paid for entirely in cash, with no change in shareholding.
Muthoot Finance Limited intends to invest up to 500 crore of additional equity into its wholly owned subsidiary, Muthoot Money Limited, a non-banking financial company, in order to strengthen its capital base and improve its capital adequacy ratio. The related party transaction, which will involve some directors from both boards, will be completed within two months and will be entirely in cash
Management View
Muthoot Finance’s Chairman, Mr. George Jacob Muthoot, reported a 37 percent YoY increase in consolidated loan AUM to Rs. 1,33,938 crore, driven by a 237 percent increase in Muthoot Money’s gold loan AUM and 40 percent growth in Muthoot Finance’s gold loan AUM.
Consolidated PAT increased by 65 percent YoY to Rs. 1,974 crore, driven by strong gold loan demand. He emphasized the company’s leadership in the segment, the growing demand for quick and affordable credit, and the ongoing digital transformation to improve efficiency, customer experience, and long-term growth.
According to Managing Director George Alexander Muthoot, the company started FY26 with a record standalone loan AUM of Rs. 1,20,031 crore, driven by 40 percent YoY and 10 percent QoQ growth in gold loans. Standalone PAT increased by 90 percent to Rs. 2,046 crore, indicating success in disbursements, efficiency, and margins.
He mentioned the growing acceptance of gold loans, ongoing digital enablement to improve access and efficiency, and supportive RBI guidelines and interest rate cuts, which position the company for long-term growth.
About the company
Muthoot Finance, India’s largest gold financing company by loan portfolio, is a trusted national brand that has revolutionized gold banking and empowered millions across the social spectrum.
Along with its core gold loan business, it provides money transfers, business and corporate loans, loans against property, personal loans, and collection services. As of June 30, 2025, the company operates in 29 states/UTs with over 4,850 branches and 30,000 employees. They secure 209 tonnes of gold, serve 200,000 customers daily, have over 100,000 retail investors, and manage loan assets worth Rs. 1,200 billion.
Analyst Outlook
Jefferies maintained a Buy rating on Muthoot Finance, raising its target price to Rs. 2,950 from Rs. 2,660, citing strong Q1 AUM growth, profit gains from NPA recoveries, and support from rising gold prices and loan-to-value potential. It anticipates NIM expansion as interest rates fall, with a profit CAGR of 23 percent and an ROE of more than 21 percent for fiscal year 26-28.
Written By Akshay Sanghavi
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