Muthoot Finance share price declines 5% despite stellar Q4 earnings

Mint

15-05-2025

Muthoot Finance delivers stellar FY25 results, but stock under pressure amid broader market sentiment
Muthoot Finance, India's largest gold loan company, delivered a strong performance for the quarter as well as financial year ended March 31, 2025. Despite the strong fundamentals, its shares fell over 5 percent on Thursday, May 15, amid overall weak market sentiment.
For the March quarter (Q4FY25), the Kerala-headquartered firm reported a 22 percent year-on-year increase in consolidated net profit at ₹ 1,444 crore, up from ₹ 1,182 crore in the same quarter last year. This surge was supported by robust growth in its lending portfolio. On a standalone basis, net profit stood at ₹ 1,479 crore, marking a 41 percent rise compared to ₹ 1,050 crore in the year-ago quarter.
The company's consolidated assets under management (AUM) jumped 37 percent year-on-year to ₹ 1.22 lakh crore, while standalone AUM surged 41 percent to ₹ 1.06 lakh crore. Muthoot's gold loan portfolio continued to be its main growth driver, with gold loan AUM reaching an all-time high of ₹ 1,02,956 crore—a 41 percent jump over the previous year.
Annual consolidated profit after tax for FY25 stood at ₹ 5,352 crore, up 20 percent from ₹ 4,468 crore last year. Standalone profit also saw a sharp 28 percent rise to ₹ 5,201 crore. The company reported its highest-ever interest income of ₹ 15,586 crore for the year, reflecting strong customer repayment trends and an expanding lending base.
In terms of operational metrics, Muthoot Finance achieved multiple milestones. The average gold loan AUM per branch touched a new high of ₹ 21.21 crore. The company disbursed ₹ 21,888 crore in gold loans to nearly 18 lakh new customers during the year—both the highest-ever figures in its history. The total gold pledged as security in Muthoot's lockers reached 208 tonnes.
To reward shareholders, Muthoot Finance declared its highest-ever dividend of 260 percent, translating to ₹ 26 per equity share of face value ₹ 10 each.
However, performance from its subsidiaries presented a mixed picture. The group's microfinance arm, Belstar Microfinance, reported a 20 percent decline in AUM to ₹ 7,980 crore, down from ₹ 10,023 crore in the previous year. The subsidiary also saw its annual net profit shrink sharply to ₹ 46 crore from ₹ 340 crore amid industry-wide stress and asset quality concerns.
Despite the exceptional earnings report, Muthoot Finance shares dropped as much as 5.1 percent to ₹ 2,139.20 on the BSE. The stock remains over 12 percent below its 52-week high of ₹ 2,444.65 touched in March 2025. It has gained 35 percent from its 52-week low of ₹ 1,580 hit in June 2024.
On a yearly basis, the stock is still up over 34 percent. But it has struggled in recent months—down around 1 percent so far in May after a 9 percent correction in April. This follows a 12 percent rally in March, a 5.5 percent decline in February, and a 5.7 percent gain in January.
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