Muthoot Finance share price dropped 10% during intraday trade on Friday, February 13, even as the brokerages maintained a positive outlook on the counter following its stronger-than-expected Q3 results.
The gold loan non-banking financial company (NBFC) announced on Thursday (February 12) a staggering 94.9% year-on-year (YoY) rise in its net profit for the third quarter compared to the previous year.
The firm recorded a net profit of ₹2,656 crore in Q3 FY26, up from ₹1,363 crore in the same quarter last year. The net interest income (NII) surged 64% YoY, reaching ₹4,467 crore, compared to ₹2,721 crore from the corresponding quarter of the preceding fiscal year.
As of December 31, 2025, the company reported consolidated loan assets under management (AUM) of ₹1,64,720 crore, reflecting a 48% increase from ₹1,11,308 crore reported at the end of December 2024.
During the third quarter ended December 2025, consolidated loan AUM increased by ₹17,046 crore, which is a 12% growth from ₹1,47,673 crore at the end of the September quarter.
The company announced a consolidated profit after tax of ₹7,209 crore for the first nine months of FY26, up from ₹3,908 crore in the previous year, reflecting an 84% YoY growth.
Should you buy, sell or hold?
Jefferies has maintained a “Buy” rating with a target price of ₹4,750, according to media reports.
According to a CNBC TV-18 report quoting Jefferies, the global brokerage said third-quarter PAT surpassed its estimate of ₹23 billion, driven by write-backs in interest income. However, standalone assets under management (AUM) grew 51% YoY but fell short of expectations due to lower loan-to-value (LTV) ratios and a quarter-on-quarter (QoQ) decline in gold tonnage.
Jefferies further noted that robust gold prices, a cushioning effect from LTV, and the relaxation of branch expansion regulations should foster strong growth in AUM. The firm anticipates stable net interest margins (NIMs), reduced operating expenses-to-AUM, and lower credit costs will lead to a 17% compound annual growth rate in earnings per share over the estimates for FY26–28, alongside a return on equity exceeding 25%.
CLSA also maintained an “Outperform” rating and set a target price of ₹4,600, citing strong overall earnings, according to reports.
The brokerage indicated that NII, pre-provision operating profit (PPOP), and PAT exceeded its projections by 6%–8%. Loan growth was reported at 11% QoQ and 51% YoY, roughly 2 percentage points above its estimate, according to media reports.
CLSA, as quoted by CNBC TV-18, mentioned that calculated loan yields increased sequentially despite a high comparison base, driven by ongoing interest recoveries, which also contributed to the earnings surprise. Consequently, the top line saw a 13% growth QoQ, according to reports.
The global brokerage house observed that the company’s business model has built-in operational leverage due to high fixed costs. Total operating expenses, adjusted for a one-off labour code impact of ₹480 million, remained flat sequentially.
Domestic brokerage Nuvama Institutional Equities indicated that Muthoot demonstrated a significant improvement in AUM growth, NIM, and credit costs once again. The strong AUM growth of 12% QoQ and 50% YoY, coupled with an 11 basis points QoQ rise in NIM and a 67 basis points decrease in the GS3 ratio, are notable positives.
According to Nuvama, the contribution from NPL/ARC/auction recoveries to NII was higher at ₹6.2 billion, compared to ₹3 billion QoQ. Core NII increased by 4% QoQ, while total NII rose by 12% QoQ. The contribution of subsidiaries to gold loans is on the rise.
The company’s business model benefits from inherent operating leverage due to high fixed costs. Total operating expenses, after adjusting for a one-off impact of ₹480 million related to labour code changes, remained stable sequentially.
“Given strong and better-than-peers earnings and Muthoot’s ability to shield loan yields from rising competition, we maintain ‘BUY’. We are revising the target price to ₹4,700/4.2x BV FY26E from ₹4,000,” said Nuvama.
Muthoot Finance share price today
Muthoot Finance share price today opened at ₹3,927 apiece on the BSE. The stock touched an intraday high of ₹4,000 and an intraday low of ₹3,576.60.
According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, Muthoot Finance’s share price witnessed a sharp gap-down opening below yesterday’s low, forming a bearish kicking pattern.
“Post the opening, prices extended the sell-off, breaching key support levels and moving averages. The prevailing weakness is likely to persist, with downside potential towards 3,400. On the upside, any bounce towards 3,800 is expected to face strong resistance,” said Bhosale.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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