- 1. Record Q1 FY26 Performance
- 2. Strong Gold Loan Growth
- 3. Better Asset Quality
- Why Consolidated Profit is Lower than Standalone Profit
- Why Muthoot Finance share is Rising: Key Takeaways
- Bottom Line
Muthoot Finance’s share price jumped around 10% today, hitting a record high, after the company reported one of its best quarterly performances in Q1 FY26. The lender posted record loan growth, a sharp rise in profits, and better asset quality, sparking strong buying interest from investors.
1. Record Q1 FY26 Performance
The company posted a consolidated profit after tax of ₹1,974 crore, which is 65% higher than the same quarter last year. The standalone profit after tax for Muthoot Finance Ltd was even higher at ₹2,046 crore, up 90% year-on-year. Consolidated Loan assets under management reached ₹1,33,938 crore, a 37% increase from last year.
2. Strong Gold Loan Growth
Gold loans remain the main driver of growth. Gold loan AUM rose 40% year-on-year to ₹1,13,194 crore. The average gold loan per branch increased 39% to ₹23.21 crore. Disbursements to new customers stood at ₹6,355 crore, serving over 4.45 lakh new borrowers in the quarter.
3. Better Asset Quality
Muthoot Finance has reduced its bad loans compared to last year. Stage III loans, which are the company’s gross NPAs, stood at about ₹3,095 crore or 2.58% of total loans, down from 3.98% a year ago. The company has also set aside ₹1,565 crore as provisions to cover potential losses, which is 1.30% of the loan book. On top of that, gold loans carry a margin of safety of around 38%, which gives extra protection against defaults.
Why Consolidated Profit is Lower than Standalone Profit
The standalone profit reflects only Muthoot Finance Ltd, while the consolidated profit includes all subsidiaries. Some subsidiaries underperformed in Q1 FY26, which brought down the consolidated number.
Top 5 subsidiaries by business size:
- Belstar Microfinance Ltd: Loss of ₹128 crore compared to a profit of ₹89.8 crore last year. Loan AUM fell 23% and higher provisions hit profits.
- Muthoot Homefin (India) Ltd: Profit of ₹2 crore versus ₹7.7 crore last year. Margins were squeezed despite AUM growth of 41%.
- Muthoot Insurance Brokers Pvt Ltd: Profit of ₹10.7 crore versus ₹15.7 crore last year due to lower brokerage income.
- Muthoot Money Ltd: Profit of ₹37 crore compared to a loss of ₹1.2 crore last year, driven by recovery in vehicle finance.
- Asia Asset Finance PLC: Profit of ₹5.2 crore versus ₹3.2 crore last year, helped by growth in Sri Lanka operations.
The main drag was the loss at Belstar Microfinance and the lower profits at Muthoot Homefin, which offset gains in other subsidiaries.
Why Muthoot Finance share is Rising: Key Takeaways
- The gold loan business is driving growth with higher average loans per branch and rising demand.
- Profit growth is exceptional, with standalone PAT up 90% and earnings per share at ₹50.22, 73% higher than last year.
- Asset quality is improving, and the strong capital base means the company can expand further.
- The digital push is working, with over 1.73 crore iMuthoot app downloads and 40 lakh registered users.
- Muthoot Finance also crossed the ₹1 trillion market capitalisation milestone, showing strong market confidence.
Bottom Line
Muthoot Finance has delivered record profits, strong loan growth, and better asset quality. While some subsidiaries pulled consolidated profit below the standalone figure, the core gold loan business is performing exceptionally well. This strong performance is why the company’s shares are rising today.
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