Shares of Muthoot Finance hit 10 percent upper circuit of Rs 2,761 on August 14 after the company delivered a stronger-than-expected June quarter (Q1FY26) performance across all key metrics, supported by stable asset quality. Brokerages responded positively, with some upgrading the stock and projecting up to an 18 percent upside from current levels.
So far this year, this gold financier stock has surged 13 percent, outperforming benchmark Nifty 50's 2 percent rise.
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Morgan Stanley raised its target price for Muthoot Finance to Rs 2,920 from Rs 2,880, citing industry-leading return on equity and strong earnings per share growth. The brokerage also highlighted ongoing consensus upgrades, in contrast to cuts seen among peers, and said the company faces negligible asset quality risk.
Jefferies also raised its price target to Rs 2,950 from Rs 2,660, noting that rising gold prices and scope to lift the loan-to-value ratio should support healthy loan growth. It views Muthoot as a defensive play in a market facing broader stress and expects a compounded annual growth rate of twenty-three percent in net profit and return on equity of twenty-one percent over FY26–28.
On the other hand, Motilal Oswal maintained a “Neutral” stance with a target price of Rs 2,790. It believes the company is well placed to sustain healthy loan growth given the favourable outlook for gold loans, but at 2.4 times FY27 price-to-book value, much of the optimism is already priced in.
For the quarter ended June 30, 2025, Muthoot Finance posted an 89.6 percent year-on-year jump in net profit to Rs 2,046 crore — its highest-ever quarterly profit.
Net interest income surged 50.6 percent to Rs 3,473 crore from Rs 2,305 crore a year ago, while net interest margins improved to 12.15 percent from 11.51 percent.
The company also reported its highest-ever consolidated loan assets under management at Rs 1.33 lakh crore, up 37 percent year-on-year.
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