Muthoot Finance shares tank 7% after robust Q4 numbers; what you need to know

The gold financier on Wednesday reported a 22% jump in consolidated profit to ₹1,444 crore for the March quarter of the 2024-25 fiscal year (Q4 FY25).

The company had reported a consolidated profit after tax (PAT) of ₹1,182 crore in the year-ago period.

On a standalone basis, Muthoot Finance's net profit grew 41% to ₹1,479 crore. The gross assets under management (AUM) stood at ₹1.06 lakh crore, a year-on-year (YoY) growth of 41%.

For the full 2024-25 fiscal year, the consolidated PAT of the group rose 20% to ₹5,352 crore. Its consolidated gross loan AUM jumped 37% to over ₹1.22 lakh crore.

"Alongside expanding our non-gold loan portfolio, we accelerated our digital initiatives to drive growth across all product segments.

"The recent regulatory guidelines are a positive step for the sector; however, we have always operated with strong governance and are already aligned with these directives. As we step into FY26, we do so with optimism and remain committed to our various stakeholders," Muthoot Finance Chairman George Jacob Muthoot said.

What analysts say

Analysts tracking the company are largely positive on the stock; however, they have raised a few concerns.

For instance, Jefferies, according to news reports, said the company's assets under management (AUM) grew 43% YoY, significantly outpacing historical averages, supported by rising demand and higher gold valuations. However, net interest margins (NIMs) fell sequentially — a reflection of cost-of-funds dynamics and competitive lending pressures.

Standalone asset quality showed improvement, with gross non-performing assets (GNPA) and credit costs both falling QoQ. However, Jefferies flagged a rise in GNPA in Muthoot’s microfinance subsidiary, suggesting that while the core gold loan book remains resilient, peripheral lending remains exposed to stress pockets.

Besides this, the reports added, Morgan Stanley notes that a fall in gold prices is a risk, as it is negative for sentiment.

Gold price trend

Gold prices declined by ₹650 to ₹96,850 per 10 grams in the national capital on Wednesday amid a weak trend in global markets, according to the All India Sarafa Association.

The precious metal of 99.9% purity had closed at ₹97,500 per 10 grams in the previous market session.

Gold of 99.5% purity depreciated ₹700 to ₹96,400 per 10 grams (inclusive of all taxes). It had settled at ₹97,100 per 10 grams on Tuesday.

According to analysts, gold prices are correcting from their record peak levels as trade tensions have eased since major economies are securing trade agreements with the US. China is the latest to strike a deal, as both countries agreed to a 90-day reduction in tariffs on each other's goods.

Muthoot Finance is a non-banking financial company (NBFC). The compny provides loans against gold jewelry and also offer other financial products like personal loans, business loans, housing finance, and money transfer services.