Geojit Financial Services research report on Muthoot Finance

Muthoot Finance Ltd., India’s largest NBFC in gold loans by loan portfolio, operates over 7,541 branches nationwide. Besides gold loans, it offers various loans, insurance, money transfer services, and gold coin sales through its subsidiaries. In Q3FY26, consolidated loan AUM rose 48% YoY to Rs. 1,64,720cr., led by 51% YoY growth in standalone gold loans, which now comprise 89% of total AUM at Rs. 1,47,552 cr. Gold loan yield stood at 20.34% in Q3FY26, supported by one-off NPA recoveries. On a normalized basis, yields are expected to remain in the 18.5–19.0% range. Meanwhile, management has raised FY26 gold loan growth guidance to 45%. Standalone profit rose sharply by 91% YoY to Rs. 7,048cr in 9MFY26, supported by improved operational efficiency and strong margins. At the same time, 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, driven by customer-led repayments under flexible repayment options. Muthoot Finance holds 205 tonnes of gold as collateral, slightly lower than 209 tonnes in the previous quarter, with an average portfolio LTV of 57%. Although fluctuations in gold prices remain a key risk, the company maintains a comfortable margin of safety of about 43%, which helps limit potential credit risk.

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