MUTH’s 1QFY25 performance was characterized by: 1) gold loan growth of ~11% YoY to ~INR809b; 2) NIM compression of ~15bp QoQ to 11.8%; and 3) the rise in gold tonnage by ~3% QoQ to 194 tonnes. PAT grew 11% YoY and 2% QoQ to ~INR10.8b (8% miss). Net total income rose 7% YoY to ~INR23.6b (in line), and PPOP was up 22% YoY at ~INR17.2b (in line). Gold loan growth was supported by gold tonnage growth, along with an increase in the customer base by ~4% QoQ to ~5.9m. LTV was largely stable QoQ at ~63%.
OutlookWe expect competitive intensity to again increase in the gold loan ecosystem, even though it might not be as aggressive as earlier. Maintain our Neutral rating with a revised TP of INR1,720 (based on 2.1x FY26E BVPS).
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