Muthoot Finance Shares Plummet Despite Record Profit Growth
Muthoot Finance shares crash 8% even after Q4 net profit soars 105% YoY. Here’s what Jefferies, Morgan Stanley say
The Economic Times
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Muthoot Finance shares fell over 8% on Friday, despite reporting a 105% year-on-year increase in Q4 net profit to ₹3,086 crore for FY 2026. Analysts from Jefferies and Morgan Stanley maintained positive ratings, citing strong growth potential, but noted challenges from increased competition and fluctuating gold prices.
- 01Muthoot Finance's revenue surged 68.5% YoY to nearly ₹8,180 crore in Q4 FY 2026.
- 02Jefferies raised FY27-28 earnings per share estimates by 6-8%, maintaining a 'Buy' rating with a target price of ₹4,350.
- 03Morgan Stanley has an 'Overweight' rating with a target price of ₹4,330, increasing EPS estimates for FY27 and FY28 by 6% and 4%, respectively.
- 04Motilal Oswal maintained a 'Neutral' rating, raising its target price to ₹3,720, while highlighting risks from increased competition.
- 05Muthoot Finance's share price has dropped 14% in 2026, despite a 57% increase over the past year.
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Muthoot Finance shares experienced a significant decline of over 8% on Friday, trading at ₹3,239 on the National Stock Exchange (NSE), despite the company reporting a 105% year-on-year increase in standalone net profit for the January-March quarter of FY 2026, reaching ₹3,086 crore. The firm's revenue from operations also saw a remarkable surge of 68.5%, totaling nearly ₹8,180 crore. For the entire financial year, Muthoot Finance achieved a record standalone profit after tax of ₹10,134 crore, marking a 95% increase compared to the previous year. Analysts from Jefferies maintained a 'Buy' rating but adjusted their target price to ₹4,350, citing strong net interest income (NII) and a 50% increase in gold loan assets under management. Morgan Stanley also expressed optimism with an 'Overweight' rating and a target price of ₹4,330, raising earnings estimates due to improved margins. However, Motilal Oswal took a more cautious stance, maintaining a 'Neutral' rating and highlighting competitive pressures in the gold loan market. Despite the recent downturn, Muthoot Finance shares have appreciated over 57% in the last year.
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The decline in Muthoot Finance's share price may affect investor confidence and market perception of the gold loan sector, potentially influencing borrowing costs for consumers.
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