Muthoot Finance shares rallied over 3 percent to Rs 2,260 apiece on February 13 after the company delivered a strong performance in its Q3FY25 results.
Over the past 3 months, the stock of this gold financier has surged over 20 percent, outperforming benchmark Nifty 50's 3 percent decline.
Riding on the wave of robust gold loan demand, Muthoot Finance posted a stellar 33 percent year-on-year (YoY) jump in net profit, reaching Rs 1,363 crore in Q3FY25. Net interest income (NII) soared 43 percent YoY to Rs 2,721 crore, while standalone loan assets under management (AUM) expanded 37 percent YoY to Rs 26,305 crore—buoyed by festive-season borrowing trends.
ALSO READ: Muthoot Finance Q3 Results: Net profit jumps 26% to Rs 1,389 crore
The board also approved fund-raising up to Rs 21,063 crore by issuance of redeemable non-convertible debentures. However, the company has taken a cautious stance in the microfinance segment, slowing disbursements to focus on strengthening collections and improving loan book quality. Muthoot sees current challenges in the microfinance sector as a temporary phase, expecting stability to return in the coming quarter.
Having said that, recently, global brokerage firm CLSA upgraded Muthoot Finance to an 'Outperform' rating from its previous 'Hold' stance, hiking its price target to Rs 2,400 per share. CLSA cited sustained strength in the gold loan market, higher gold prices, and reduced competition as key factors favoring gold-focused NBFCs.
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