Muthoot Finance Shares Jump 10% After Strong Q2 Earnings — Gold Loan Demand at Multi-Year High

Muthoot Finance Ltd (NSE: MUTHOOTFIN), India’s largest gold loan NBFC, surged nearly 10% on November 14 after posting a stellar Q2 FY26 performance, driven by record gold loan demand, soaring gold prices, and improved asset quality.
The stock also touched a fresh 52-week high, reflecting strong investor confidence. The company reported a ~87–90% YoY jump in net profit, a significant expansion in loan AUM, and raised its FY26 growth guidance sharply.

Gold loan AUM continues to be the backbone of the company’s growth, aided by rising gold prices, stricter norms for unsecured credit, and increased preference for secured lending.

 

About the Company

Muthoot Finance Ltd is India’s largest gold loan Non-Banking Financial Company (NBFC), headquartered in Kochi, Kerala. It operates over 4,800+ branches across 29 states and union territories, serving more than 2 lakh customers daily, with over 202 tonnes of gold jewellery held as collateral.

Muthoot Finance is the flagship company of the Muthoot Group (or Muthoot M. George Group), a diversified business conglomerate founded in 1887 by Muthoot Ninan Mathai.
The business is currently owned and led by the Muthoot family, particularly the late M.G. George Muthoot’s family, with leadership continuing under the next generation.
The majority shareholding remains with the promoter family (73.35%), indicating strong family-led control and governance.

The Group operates across 20 diversified business divisions, including financial services, hospitality, healthcare, real estate, education, microfinance, and more. While Muthoot Finance is the largest and most profitable entity, the overall conglomerate has a presence across India and international markets including the UAE, UK, and USA, with a major stake in Asia Asset Finance (Sri Lanka).

 

Key Divisions Under the Muthoot Group

 

1. Financial Services & Allied Businesses (Core Segment)

• Muthoot Finance Ltd. – India’s largest gold loan NBFC; also offers money transfer, business loans, corporate loans, collection services, microfinance lending partnerships and more.
  
  

• Muthoot Fincorp Ltd. – NBFC offering gold loans, SME loans, personal loans, and consumer finance.
  
  

• Muthoot Capital Services Ltd. – Focused on two-wheeler and auto loans.
  
  

• Muthoot Microfin Ltd. – Microfinance company supporting underserved borrowers.
  
  

• Muthoot Housing Finance Company Ltd. – Provides affordable housing loans.
  
  

• Muthoot Insurance Brokers Pvt. Ltd. – Life & general insurance distribution.
  
  

• Muthoot Securities Ltd. – Brokerage and investment advisory.
  
  

• Muthoot Forex Ltd. – Foreign exchange and remittance services.
  
  

• Muthoot Money Ltd. – Online and SME-focused lending solutions.
  
  

• Muthoot Pappachan Chits (India) Pvt. Ltd. – Chit fund business.
  
  

 

2. Healthcare

Operates multi-speciality hospitals, diagnostic centres, and a cancer research facility under Muthoot Healthcare.

 

3. Hospitality & Leisure

Manages premium hotels and eco-resorts under the Xandari brand across India and Costa Rica, as well as boutique hotels and Kerala houseboats.

 

4. Education

Runs schools and colleges including:

• St. George’s School
  
  

• Paul George Global School
  
  

• Muthoot Institute of Science & Technology
  
  

• Multiple nursing and allied health colleges
  
  

 

5. Real Estate & Infrastructure

Engaged in residential and commercial real estate under Muthoot Housing & Infrastructure.

 

6. Precious Metals

Muthoot Gold Bullion Corporation deals in 24K gold and silver coins/bars.

 

7. Power Generation

Operates wind farms via Muthoot Alternate Energy Resources.

 

8. Media

Owns Chennai Live 104.8 FM (English radio channel).

 

9. Travel Services

Provides travel planning and tour packages under TravelJango.

 

10. Plantations & Estates

Manages cardamom, tea, rubber, and coconut plantations.

 

11. Information Technology

Muthoot Pappachan Technologies handles in-house tech development and IT infrastructure.

 

Key Company Facts

 

Muthoot Finance – Major Moves in 2025

• November 2025: Q2 FY26 net profit surged nearly 90% YoY, boosting stock by ~10%
  
  

• October 2025: Loan AUM crossed Rs.1.36 trillion, highest in company history
  
  

• September 2025: RBI tightened unsecured lending norms → gold loans gained additional momentum
  
  

• August 2025: Launched new digital gold loan platform with instant credit
  
  

• July 2025: Approved Rs.35,000 crore NCD fund raise to support accelerated loan growth
  
  

• June 2025: Daily footfalls for gold loans reached all-time high in southern and western states
  
  

 

Evolution of Muthoot Finance (Year-Wise Journey)

 

Major Achievements

• India’s largest gold loan company
  
  

• 202+ tonnes of gold under management
  
  

• 2 lakh+ customers served daily
  
  

• 4,800+ branches — one of the largest financial networks in India
  
  

• Strong dividend track record with 22% payout ratio
  
  

 

Corporate Actions Journey

 

Financial Performance

Quarterly Results (Q2 FY26 vs Q2 FY25)

Key Highlights

• Revenue rose to Rs.7,283 cr
  
  

• Profit soared to Rs.2,412 cr
  
  

• Financing margins improved to 44%
  
  

• Customer addition strong across South & West India
  
  

 

Yearly Performance (FY24 vs FY25)

 

 

Balance Sheet Highlights

 

Cash Flow Overview

 

Shareholding Pattern (Sep 2025)

• Promoters: 73.35%
  
  

• FIIs: 11.58%
  
  

• DIIs: 11.37%
  
  

• Public: 3.70%
  
  

FIIs have steadily increased their stake over the last 6 quarters.

 

Peer Comparison

 

Muthoot Finance stands out with:

Highest profitability in gold-loan lending

Better ROE compared to peers (≈20%)

A focused business model, unlike diversified NBFCs

Strongest YoY profit growth among major NBFCs

 

Outlook for 2026 and Beyond

• Gold loan demand expected to remain strong due to record-high gold prices
  
  

• Stricter rules for unsecured lending will shift customers toward gold loans
  
  

• Digital gold loan products will accelerate customer acquisition
  
  

• AUM growth guidance revised from 15% → 30–35% for FY26
  
  

• Expansion strategy focused on Tier-3 and rural markets
  
  

 

Strengths & Risks

Strengths

• Market leader in gold loans with 4,800+ branches and 202 tons of gold as collateral.
  
  

• High profitability — ROE at 19–20% and strong interest spreads.
  
  

• Consistent growth in AUM driven by strong gold loan demand.
  
  

• Healthy dividend payout (avg 22%).
  
  

• Strong asset quality — gold loans have low NPAs due to secured nature.
  
  

• Operational efficiency from decades of NBFC expertise.
  
  

Risks

• Business concentrated in gold loans, making it sensitive to gold price volatility.
  
  

• High competition from banks & NBFCs (Manappuram, banks offering cheaper loans).
  
  

• Regulatory risks — RBI norms for NBFCs can impact margins.
  
  

• Rising borrowing costs may affect net interest margin.
  
  

• Geographical concentration— historically focused heavily in South India.

 

Investor View 

Muthoot Finance remains a high-conviction NBFC pick due to strong gold loan demand, consistent profit growth, robust margins, and rising AUM.
Valuations are reasonable, and market sentiment remains positive following upgraded FY26 growth guidance.

 

Conclusion

Muthoot Finance enters FY26 with excellent operating momentum, supported by strong gold loan demand, record AUM expansion, and solid profitability. With rising gold prices and a shift towards secured lending, the company is well-positioned to lead the NBFC sector in the coming years.

 

Frequently Asked Questions

1. What does Muthoot Finance primarily do?

Muthoot Finance is India’s largest NBFC in the gold loan segment, offering quick, collateral-backed loans secured against household gold jewellery.

 

2. Who owns Muthoot Finance?

Muthoot Finance is part of The Muthoot Group, founded by M. George Muthoot. The company is currently owned and promoted by the Muthoot family, with over 73% promoter holding (Sep 2025).

 

3. Why did Muthoot Finance stock rise recently?

The stock surged after the company reported strong Q2 FY26 results, supported by high gold loan demand due to rising gold prices and an expanding loan portfolio.

 

4. Is Muthoot Finance a debt-heavy company?

Yes, being an NBFC, borrowings form the backbone of its business model. Rising borrowings are typically used to expand the lending book and support disbursements.

 

5. Does Muthoot Finance offer dividends?

Yes. The company has maintained a healthy dividend payout ratio of ~22%, reflecting stable profitability.

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