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Informist, Monday, Feb. 9, 2026

 

By Divya Moolayattil

 

MUMBAI – Muthoot Finance Ltd. is expected to report a sharp year-on-year rise in its December quarter net profit and net interest income due to rising gold prices and steady growth in loans. However, its bottom line is expected to fall marginally from the trailing quarter due to a rise in operating expenses.

 

The non-bank financer's bottom line is expected to rise 71% on year but fall marginally on quarter to INR 23.32 billion for the December quarter. The highest estimate for the company's net profit is INR 27.33 billion from Elara Securities (India) Pvt. Ltd. and the lowest estimate is INR 19.19 billion from Nirmal Bang Equities Pvt. Ltd.

 

The spot price of gold on Dec. 31 was up nearly 75% from a year ago and was up over 15% sequentially. Analysts expect the rally in gold prices to provide tailwind for Muthoot Finance. Any increase in gold price allows borrowers to get higher loans or avail of 'top-up' loans against the gold already pledged with the lender as collateral. As a result, the company's loan portfolio expands, which boosts revenue and profit. "Muthoot is expected to see strong loan growth and lower credit costs due to elevated gold prices during Oct-Dec. Tonnage and client additions are expected to remain better for the company," Nirmal Bang Equities said. 

 

The Kerala-based lender's net interest income is expected to rise to INR 42.02 billion for the December quarter, up over 54% on year and 5% on quarter. The highest estimate for the company's net interest income is INR 48.9 billion from YES Securities (India) Ltd, while the lowest estimate is INR 35.10 billion from Nirmal Bang.

 

The company's net interest margin for the December quarter is expected to be 10.5-12.5%, down from 11.6% a year ago and from 12.7% in trailing quarter, according to brokerages. The sequential fall is due to elevated yields from loans sold to asset reconstruction companies in September quarter.

 

India's largest gold financier is expected to post robust on-year growth in gold assets under management at INR 1.4 trillion, up 40-49% on year. Credit costs are likely to fall 40-60 bps on year to 0.3-0.5% for the December quarter. "Credit costs are improving with exit from challenges in personal and microfinance loan segments," Kotak Securities said.

 

Operating expenses for the quarter are seen rising more than 30% on year and nearly 7% on quarter to INR 9.4 billion. "Higher interest reversals and operational expenses should delay meaningful earnings recovery until after FY26," Elara Securities said.

 

The gold financier's asset quality is expected to improve for the December quarter and its gross stage III asset ratio is likely to fall 192 bps on year to 2.3%. Stage III assets of a non-banking finance company refer to loans that have been overdue for more than 90 days. Provisions are expected to fall to INR 1.0 billion-INR 1.4 billion, down 33-52% on year. The December quarter provisions can fall on either side of the provisions in the trailing quarter, which were INR 1.1 billion.

 

Brokerages will keep an eye on the company management's commentary on gold loan growth and margin guidance. Monday, shares of Muthoot Finance ended at INR 3,779.80 apiece, on the National Stock Exchange, up 2%. The shares have risen nearly 11% since the September quarter earnings were announced. The company will announce its December quarter results Thursday.

 

Of the four brokerage reports on the company available with Informist, three have a 'buy' or equivalent recommendation on the stock with an average target price of INR 3,933 per share. This is 4% higher than the current market price. Only one has a 'hold' recommendation with a target price of INR 3,800 apiece.

 

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

 

Brokerages	NII	Net ProfIt
Elara Securities (India) Pvt Ltd	45.97	27.33
Nuvama Wealth Management Ltd	43.90	24.90
YES Securities (India) Ltd	48.94	24.84
Kotak Securities Ltd	39.21	22.08
Motilal Oswal Financial Services Ltd	38.99	21.60
Nirmal Bang Equities Pvt Ltd	35.11	19.19
Average	42.02	23.32

 

End

 

Edited by Akul Nishant Akhoury

 

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