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Informist, Friday, Jul. 31, 2026

 

By Divya Moolayattil

 

MUMBAI – Muthoot Finance Ltd. is expected to report a sharp year-on-year increase in its net profit and net interest income for the June quarter on the back of a strong growth in assets under management, higher yields, and a reduction in credit costs in non-gold loan portfolios, brokerages tracking the company said. However, the sequential rise in net profit and net interest income are likely to be marginal, owing to rising competition and softness in gold prices towards the latter part of the June quarter.

 

The non-bank financier's bottom line is expected to rise 53% on year to INR 31.34 billion for the June quarter, according to the average of estimates from seven brokerages. On quarter, the net profit is seen marginally higher. The highest estimate for net profit is INR 35.39 billion from YES Securities (India) Ltd. and the lowest is INR 29.10 billion from IDBI Capital Market Services Ltd.

 

The Kerala-based lender's net interest income is expected to rise over 56% on year to INR 54.05 billion for the June quarter. Sequentially, the net interest income is seen up 4%. The highest estimate for net interest income is INR 63.20 billion from YES Securities and the lowest is INR 51.20 billion from IDBI Capital. The net interest income is seen to be driven by robust gold loan demand and stable yields.

 

Muthoot Finance's net interest margin for the June quarter is expected to be in the 12.4-12.8% range, up 28-65 basis points on year, but a decline of 34-96 bps on quarter, according to estimates from three brokerages. Some brokerages expect a sequential fall in the margin due to moderation in yields in the June quarter. "Despite higher funding costs in first quarter, NIM (net interest margin) performance is likely to be mixed, driven by varying yields on pricing actions and customer acquisition strategies," Bank of America Global Research said. 

 

India's largest gold financier is expected to post robust growth in assets under management with 38-42% rise on year and 3.5-5% growth on quarter, according to estimates from three brokerages. The growth in assets under management is seen to be driven by higher gold prices, stronger disbursements, and higher loan to values. Credit cost is likely to be 0.6% in the June quarter, up nearly 50 bps on year and steady on quarter. "We expect healthy gold loan asset under management accretion to continue in first quarter for gold financiers, despite headwinds from gold price decline and competitive intensity on rising gold financing focus across major NBFCs," Bank of America Global Research said.

 

"Gold loan financier should deliver another quarter of strong AUM growth. 24K (carat) gold remains well above year-ago levels even after correcting from the March'26 all-time high (INR 142,000/10g late June vs. INR 169,000/10g peak), continuing to expand LTVs and support disbursements for Muthoot and Manappuram's gold books," IDBI Capital said. 

 

Muthoot Finance will announce its June quarter results Saturday. Brokerages will watch out for management's commentary on gold loan growth, loan to value duty discipline, and margin guidance.

 

At 1011 IST, shares of Muthoot Finance were trading at INR 3,070 apiece on the National Stock Exchange, up 2% from Thursday. The stock is down 13% since the company announced its March quarter earnings. 

 

Of the seven brokerage reports on the company available with Informist, five have a "buy" or an equivalent recommendation on the stock with an average target price of INR 3,973 per share. This is nearly 29% higher than the current market price. Two brokerages have a "hold" recommendation on the stock with a target price of INR 3,599.

 

Following are the June quarter earnings estimates for Muthoot Finance from seven brokerages, in descending order of the estimates of net profit, in INR billion:

 

 

Brokerage	Net Interest Income	Net Profit
YES Securities (India) Ltd.	63.20	35.40
Motilal Oswal Financial Services Ltd.	55.08	31.75
Kotak Securities Ltd.	51.89	31.57
Nuvama Wealth Management Ltd.	52.35	30.97
PhillipCapital (India) Pvt. Ltd.	52.11	30.61
Bank of America Global Research	52.53	30.02
IDBI Capital Market Services Ltd.	51.20	29.07
Average	54.05	31.34

 

End

 

Edited by Shubhayan Bhattacharya

 

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