Muthoot Finance Falls 5% Despite 22% YoY Jump in Q4 Profit, Record AUM; Should You Invest?
Muthoot Finance stock fell 5.22% during the day to Rs 2,142 per share, biggest intraday loss since April 11 this year; Check target price
Muthoot Finance Share Price Today: Shares of Muthoot Finance dropped over 5% on Thursday, even as the company reported a 30% year-on-year rise in net profit for Q4 FY2025 and achieved its highest-ever assets under management (AUM).
The stock fell as much as 5.22% intraday to Rs 2,142 — its sharpest single-day decline since April 11. It later trimmed losses to trade 4.5% lower at Rs 2,157, underperforming the Nifty 50, which was down 0.5% at 9:45 AM.
While the stock has remained rangebound in May, it has recovered roughly 10% from last month's lows of Rs 1,965. Year-to-date, Muthoot Finance has gained 0.7%, compared to a 3.6% rise in the benchmark Nifty 50. The company's current market capitalisation stands at Rs 86,664.01 crore.
Should You Invest in Muthoot Finance?
Brokerages remain largely positive on the stock despite the recent dip.
Nirmal Bang Institutional Equities maintained its 'Buy' rating and raised the target price to Rs 2,693 (from Rs 2,680), citing a 13.3% premium to the five-year average price-to-adjusted book value (P/ABV) multiple of 2.65 for the standalone business.
Motilal Oswal Financial Services (MOFSL) noted that Muthoot delivered a strong operational performance in Q4, driven by robust gold loan growth, increased gold tonnage, and healthy customer additions. However, margins contracted sequentially due to higher borrowing costs, although yield pressure remained minimal. Asset quality improved, aided by gold auctions that helped reduce credit costs.
Looking ahead, MOFSL said Muthoot is well-positioned to sustain loan growth amid reduced competition from banks and limited availability of unsecured credit. However, it warned that uncertainty around final RBI guidelines on gold lending could be a short-term drag on the stock, setting a target price of Rs 2,400.
Nuvama Institutional Equities also retained its 'Buy' recommendation, raising its target price to Rs 2,625 (from Rs 2,550), based on 3.1x FY26E book value. Nuvama highlighted that NBFCs have suggested changes to the draft RBI guidelines on loan-to-value (LTV) ratios, which could benefit both lenders and borrowers.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
First Published:
May 15, 2025, 11:24 IST
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