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Muthoot Finance shares jumped 10% to a record Rs 2,760.8 on Thursday, August 14; Should you buy or book profits?
Muthoot Finance
Muthoot Finance Share Price: Muthoot Finance shares jumped 10% to a record Rs 2,760.8 on Thursday, August 14, after multiple brokerages, including Morgan Stanley and Jefferies, raised their ratings and price targets following the company’s strong June quarter results.
Morgan Stanley upgraded the gold loan financier from “equalweight” to “overweight” and lifted its price target to Rs 2,920 from Rs 2,880, implying a 16% upside from Wednesday’s close. The brokerage cited three key reasons for the upgrade — industry-leading RoE and EPS growth, potential consensus upgrades unlike cuts seen in peers, and negligible asset quality risk despite a likely rise in bad loans.
Jefferies also raised its price target to Rs 2,950 from Rs 2,660, forecasting over 17% upside. It highlighted tailwinds from firm gold prices, scope to lift loan-to-value (LTV) ratios, and resilient loan growth, calling the stock a defensive bet amid broader market stress. Jefferies expects a 23% net profit CAGR and 21% RoE over FY26–FY28.
Motilal Oswal, however, maintained a “neutral” stance with a price target of Rs 2,790 (11% upside), saying the positives are already priced in at 2.4x FY27 P/BV, though it acknowledged a favourable gold loan outlook due to limited unsecured credit availability.
Muthoot Finance Q1 Result Highlights
Muthoot Finance’s Q1 performance beat estimates across metrics. AUM grew 42% year-on-year to Rs 1.2 lakh crore, with gold loan AUM up 40% to Rs 1.13 lakh crore. Asset quality improved, with gross Stage 3 assets down to 2.58% from 3.41% in the previous quarter, and net Stage 3 assets falling to 2.1% from 2.79%.
The board also approved equity infusions of up to Rs 500 crore in Muthoot Money (4% of total AUM) and Rs 200 crore in Muthoot Homefin (2% of total AUM). Currently, 15 of 25 analysts rate the stock a “buy,” six recommend “hold,” and four advise “sell.”
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Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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