Hold Muthoot Finance: target of Rs 4000: ICICI Securities

ICICI Securities recommended hold rating on Muthoot Finance with a target price of Rs 4000 in its research report dated February 13, 2026.

Broker Research

February 20, 2026 / 13:14 IST

Hold

ICICI Securities's research report on Muthoot Finance

We have backed Muthoot Finance to exhibit strong execution, which has been a constant feature with the company over the years. This has been helped by the positive demand cycle and overall favourable regulations. Muthoot’s standalone business performance has been strong in terms of AUM-yield balance, illustrated by a +40%/55bps YoY change in standalone AUM/yields in FY25 and ~51%/162bps YoY in 9MFY26, before adjusting for recovery and assignment income. Key business drivers ahead: 1) Managing NIMs (calculated; 11.3% in FY25 and 12.2%/12.8%/13% in Q1/Q2/Q3FY26 and growing tonnage/new clients (10.6%/12.2% YoY growth in FY25 and 1.5%/4.5% YoY in 9MFY26).

Outlook

Downgrade to HOLD (from Add); TP revised to INR 4,000 (INR 2,670 earlier) Our target price is based on a 2.8x FY28E P/B (2.5x FY27E earlier) for Muthoot’s standalone business and 1x FY28E P/B (1x FY27E earlier) for home finance and 1x (unchanged) FY28E P/B for others.

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