Muthoot Finance shares fall over 14% following weak sequential results in Q1; here’s what analysts said

At around 3:02 PM, the stock was trading 7.53% lower at ₹2,884.70 per equity share.

The scrip has fallen 5% in the past week and 6% over the month. On a year-to-date (YTD) basis, it has lost 25%.

While the share hit a 52-week high of ₹4,149.50 per unit on January 29, 2026, it touched a year’s low of ₹2,476.60 on August 13, 2025.

Q1 results

Gold loan NBFC Muthoot Finance on Saturday reported a 43% year-on-year (YoY) increase in its consolidated profit to ₹2,825 crore for the first quarter ended June 2026 (Q1 FY27), as against ₹1,974 crore in the corresponding quarter of the previous year.

However, sequentially, its profit declined 16.86% quarter-on-quarter (QoQ) from ₹3,398 crore in the preceding quarter, according to a regulatory filing.

Its interest income advanced % YoY to ₹8,557 crore during the quarter under review, compared with ₹6,288 crore in the first quarter of the 2025-26 fiscal year (Q1 FY26). It fell % QoQ from ₹9,009 crore in the March quarter of FY26.

Its net interest margin (NIM) contracted by 174 basis points (bps) YoY and 297 bps QoQ to 10.41% in Q1 FY26, from 12.15% in the year-ago period, and 13.38% in the quarter-ago period.

At the same time, total expenses increased to ₹4,898 crore, as against ₹3,812 crore reported in the first quarter of the previous financial year.

The company's loan assets under management (AUM) increased 43% YoY to ₹191,532 crore as against ₹1,33,938 crore last year in the same period.

New Appointment

The board in its meeting also recommended the appointment of Alexander George as the managing director of the company, effective October 1, 2026.

The appointment is subject to approval of the shareholders in the upcoming AGM of the company, it said. The board also cleared the proposal for elevation of K R Bijimon as the Chief Executive Officer of the company with effect from October 1, 2026.

The current managing director, George Alexander Muthoot, will assume the role of executive vice chairman.

In his new role, George Alexander Muthoot will continue to guide the organisation, mentor the next generation of leadership and provide strategic direction as the Company enters its next phase of growth, it said.

The board approved an additional investment of ₹32 crore in Asia Asset Finance PLC under the rights issue being carried out by Asia Asset Finance PLC, it added.

Analysts' view

The company’s management expects its yields to stabilise at 18-18.5%, but, as per the analysts, selective rate reductions, a higher mix of lower-yielding loans and limited relief on funding costs could keep profitability under pressure.

While Muthoot Finance’s asset quality remains stable, margin reset adds pressure to the earnings growth trajectory.

The firm also changed its earlier stance of profitability over growth, and despite a 4% QoQ correction in gold prices, its AUM surged 6% QoQ.

The analysts further noted that competition, along with range-bound gold prices, could weigh on earnings per share (EPS) growth in FY27. They cut its EPS growth for FY27-28 by 7-8% and see FY27 growth of 5%.

Muthoot Finance has a total market capitalisation of ₹1.16 lakh crore as of August 3, 2026, according to data on the NSE.