Muthoot Finance shares skyrocket more than 10.5%, hitting all-time high on robust Q2 numbers; analysts give a thumbs up

The company on Thursday reported an over 87% rise in its standalone net profit to ₹2,345 crore for the second quarter ended September 2025.

The company posted a net profit of ₹1,251.1 crore in the second quarter of the previous fiscal.

The total income rose to ₹6,461 crore compared to ₹4,126 crore seen in the corresponding period a year ago, Muthoot Finance said in a regulatory filing.

During the quarter, interest income increased to ₹6,304 crore against ₹4,068 crore logged in the second quarter of FY25.

The company's expenses stood at ₹3,309 crore compared to ₹2,418 crore registered in the second quarter of the previous year.

During Q2 FY26, gold loan AUM increased by ₹11,723 crore, registering a growth of 10%.

Muthoot Finance Q2: Other highlights

• The company said its board has approved incremental fundraising up to ₹35,000 crore by issuing redeemable non-convertible debentures by way of private placement, in multiple tranches, as may be decided by the Board of Directors or a committee thereof from time to time.

• The board also approved an additional equity infusion of ₹500 crore in Muthoot Money Limited, a wholly owned subsidiary of the company.

Muthoot Finance Q2: Upbeat guidance

The company, as per news reports, has guided for continued AUM growth led by gold loan and microfinance segments, expanding the branch network by 300+ locations, launching digital gold and neo banking solutions, targeting a consolidated AUM CAGR of 15–17%, and focusing on cost optimisation and a diversified lending portfolio.

Muthoot Finance: Analysts give a thumbs up

Global investment firms, tracking the stock, are bullish on it post the September quarter numbers, and they opined that the stock is expected to perform well in the coming days as well.

CLSA, for instance, said unsurprisingly, it was a strong quarter for growth, with gold loans up 10% QoQ/47% YoY to ₹1.32 trillion.

It further said that the company's NIM expanded 50 bps to 12.7%, driven by interest writebacks on GNPL recoveries and a lower cost of funds. The C/I ratio declined more than 100 bps QoQ as the business has a high degree of operating leverage. CLSA expects a strong 25% AUM CAGR over FY25-27CL.

In a financial firm, the C/I ratio refers to the cost-to-income ratio (CIR), a key metric used to measure operational efficiency. It expresses the proportion of a firm's operating expenses relative to its operating income.

Echoing similar views, analysts at Jefferies said Q2 FY26 NII beat estimates by 11%, while PPOP/PAT beat estimates by around 23%. However, standalone AUM grew, which grew 47% (10% QoQ), and was a tad below its estimates due to lower LTV. Core NIMs and GNPA fell QoQ.

The global financial services firm added that the gold price tailwind (+10% vs. 2Q exit) and LTV buffer should drive 25% AUM CAGR over FY25-27e. NIMs should expand, while credit costs should ease. It sees 36% EPS CAGR with 24%+ ROE over FY26-27e.

Bernstein also opined that it was a strong quarter for Muthoot Finance. It added that strong AUM growth continues and that its NIM expanded further on higher recoveries. ROE crossed 30% with EPS growth at 87%, it notes.