Muthoot Finance shares jump 10% to hit record high after Q1 results. Should you buy?
Morgan Stanley upgrades stock, targets Rs 2,920 with 16% upside
Jefferies raises target to Rs 2,950; growth prospects strong
Shares of Muthoot Finance surged 10% in early trading on Thursday, hitting an all-time high following the company's robust Q1FY26 results and a series of analyst upgrades.
The gold loan financing company has seen its stock lifted by strong quarterly performance, rising investor confidence, and positive brokerage recommendations. Shares of the company were trading 10.43% higher at Rs 2,772.55 on the BSE at 10:04 am.
Morgan Stanley upgraded Muthoot Finance to 'overweight' from its previous 'equalweight' rating, raising the price target to Rs 2,920 from Rs 2,880. The revised target implies a potential upside of 16% from Wednesday's closing price. The brokerage cited three key reasons for the upgrade: group-leading return on equity (RoE) and earnings per share (EPS) growth, potential ongoing consensus upgrades contrary to peers, and negligible asset quality risk despite a likely rise in bad loans.
Jefferies also raised its price target to Rs 2,950 from Rs 2,660, implying over 17% upside, highlighting tailwinds to gold prices and room to lift loan-to-value ratios to support healthy loan growth. Analysts expect the company to deliver a net profit CAGR of 23% and an RoE of 21% over FY26–28.
On the flip side, Motilal Oswal retained a 'neutral' rating with a price target of Rs 2,790, suggesting limited upside potential of 11%. The brokerage noted that while favourable gold loan trends and limited unsecured credit support growth, the current price already reflects many positives.
Muthoot Finance's Q1 results were significantly better than expected. Consolidated loan assets under management (AUM) hit a record Rs 1,33,938 crore, up 37% YoY, with standalone AUM rising 42% to Rs 1,20,031 crore. Profit after tax reached Rs 2,046 crore, a 90% increase from the year-ago period. Gold loan AUM grew 40% YoY to Rs 1,13,194 crore.
The company has also approved additional equity infusion of Rs 500 crore in Muthoot Money and Rs 200 crore in Muthoot Homefin. During the quarter, it opened 22 new branches, crossed a market capitalisation of Rs 1 trillion, and won six awards at the E4M Golden Mikes, including recognition for its 'Sunheri Soch' Season 3 campaign.
George Jacob Muthoot, Chairman of Muthoot Finance, said, 'As the Indian economy advances, demand for quick, reliable, and affordable credit is rising – and gold loans remain a critical enabler in this space. We are also accelerating our digital transformation journey to ensure faster, more seamless credit access for millions of customers across the country. Strategic investments in technology and innovation are enhancing operational efficiency and customer experience. With this momentum, we are confident of sustaining strong growth in the quarters ahead.'
Analyst sentiment remains largely positive, with 15 out of 25 brokers maintaining 'buy' ratings on the stock, six 'hold,' and four 'sell.' Following the strong quarterly performance, Nirmal Bang upgraded its rating from 'hold' to 'buy,' while Nuvama reiterated a 'buy' with an increased target of Rs 2,993, citing the company's strong earnings and growth prospects.
Muthoot Finance's record-breaking Q1 has made it a stock to watch, with strong fundamentals, favorable market conditions, and continued institutional support driving investor interest.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
Shares of Muthoot Finance surged 10% in early trading on Thursday, hitting an all-time high following the company's robust Q1FY26 results and a series of analyst upgrades.
The gold loan financing company has seen its stock lifted by strong quarterly performance, rising investor confidence, and positive brokerage recommendations. Shares of the company were trading 10.43% higher at Rs 2,772.55 on the BSE at 10:04 am.
Morgan Stanley upgraded Muthoot Finance to 'overweight' from its previous 'equalweight' rating, raising the price target to Rs 2,920 from Rs 2,880. The revised target implies a potential upside of 16% from Wednesday's closing price. The brokerage cited three key reasons for the upgrade: group-leading return on equity (RoE) and earnings per share (EPS) growth, potential ongoing consensus upgrades contrary to peers, and negligible asset quality risk despite a likely rise in bad loans.
Jefferies also raised its price target to Rs 2,950 from Rs 2,660, implying over 17% upside, highlighting tailwinds to gold prices and room to lift loan-to-value ratios to support healthy loan growth. Analysts expect the company to deliver a net profit CAGR of 23% and an RoE of 21% over FY26–28.
On the flip side, Motilal Oswal retained a 'neutral' rating with a price target of Rs 2,790, suggesting limited upside potential of 11%. The brokerage noted that while favourable gold loan trends and limited unsecured credit support growth, the current price already reflects many positives.
Muthoot Finance's Q1 results were significantly better than expected. Consolidated loan assets under management (AUM) hit a record Rs 1,33,938 crore, up 37% YoY, with standalone AUM rising 42% to Rs 1,20,031 crore. Profit after tax reached Rs 2,046 crore, a 90% increase from the year-ago period. Gold loan AUM grew 40% YoY to Rs 1,13,194 crore.
The company has also approved additional equity infusion of Rs 500 crore in Muthoot Money and Rs 200 crore in Muthoot Homefin. During the quarter, it opened 22 new branches, crossed a market capitalisation of Rs 1 trillion, and won six awards at the E4M Golden Mikes, including recognition for its 'Sunheri Soch' Season 3 campaign.
George Jacob Muthoot, Chairman of Muthoot Finance, said, 'As the Indian economy advances, demand for quick, reliable, and affordable credit is rising – and gold loans remain a critical enabler in this space. We are also accelerating our digital transformation journey to ensure faster, more seamless credit access for millions of customers across the country. Strategic investments in technology and innovation are enhancing operational efficiency and customer experience. With this momentum, we are confident of sustaining strong growth in the quarters ahead.'
Analyst sentiment remains largely positive, with 15 out of 25 brokers maintaining 'buy' ratings on the stock, six 'hold,' and four 'sell.' Following the strong quarterly performance, Nirmal Bang upgraded its rating from 'hold' to 'buy,' while Nuvama reiterated a 'buy' with an increased target of Rs 2,993, citing the company's strong earnings and growth prospects.
Muthoot Finance's record-breaking Q1 has made it a stock to watch, with strong fundamentals, favorable market conditions, and continued institutional support driving investor interest.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.) Join our WhatsApp Channel
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