The newly assigned target prices reflect a healthy 19% upside in the stock from its closing price on Wednesday.
Additionally, after the results, the stock surged 11.3% to its new 52-week high of Rs 2,793.65 on the BSE.
Here’s a detailed look at what these brokerage firms said:
Jefferies: Buy| Target price: Rs 2,950
Jefferies has maintained its ‘Buy’ rating on Muthoot Finance while increasing its target price to Rs 2,950 from Rs 2,660, valuing the stock at 2.7x September 2027 estimated book value. The brokerage highlighted the company’s 90% YoY growth in standalone profit to Rs 2,046 crore, driven by strong gold loan growth, margin expansion, and NPA recoveries.
According to Jefferies, Muthoot Finance’s Q1 performance benefited from a favourable macro environment for gold loans, with AUM up 42% YoY and loan-to-value (LTV) ratios offering headroom for further growth. Margins improved sequentially, with the net interest margin (NIM) rising by 88 basis points to 12.2%. This was aided by recoveries totalling Rs 3.5 billion, including Rs 1 billion from asset reconstruction companies, and the rest from non-performing loan settlements.The brokerage also noted that while loans are largely fixed-rate, about half of borrowings are floating and mostly linked to MCLR, implying some lag in cost repricing. Jefferies expects Muthoot to deliver a 23% profit CAGR with return on equity (ROE) exceeding 21% over FY26–28, supported by steady loan growth, controlled credit costs, and limited loan losses.
Nuvama: Buy| Target price: Rs 2,993
Nuvama has also reiterated its ‘Buy’ recommendation, raising its target price to Rs 2,993 from Rs 2,625, based on a 3.4x FY26 estimated book value. The brokerage described Muthoot’s Q1FY26 as a “strong all-round beat,” significantly outperforming peers across growth, profitability, and asset quality metrics.
Nuvama pointed out that consolidated AUM rose 10% QoQ and 42% YoY, with gold AUM alone growing 40% YoY and 10% QoQ. Margins expanded by 88 basis points sequentially, aided by recoveries from both NPL settlements and ARC transactions. Even excluding recoveries, yields remained steady, unlike the declines seen among other lenders in the sector.
The brokerage also highlighted the company’s efficient cost management and significant reduction in credit costs during the quarter. Recoveries of Rs 3.5 billion, including Rs 1 billion from ARC sales, directly contributed to yield improvement. Additionally, subsidiaries’ growing contribution to the gold loan business is expected to support overall momentum. Nuvama added that management remains confident in sustaining both yield and growth levels going forward.
Muthoot Finance Q1 results
Muthoot Finance on Wednesday reported a consolidated net profit of Rs 1,974 crore for the quarter ended June 30, 2025, up 65% from Rs 1,196 crore in the corresponding period last year.
Sequentially, profit rose 37% from Rs 1,444 crore in Q4FY25. The lender’s consolidated loan assets under management (AUM) reached a record Rs 1,33,938 crore, representing a 37% year-on-year increase and a 10% rise from the previous quarter.
Gold loan AUM, a key business segment for the company, grew 40% YoY to Rs 1,13,194 crore, marking its highest annual growth in this segment to date.
The company also reported other operational highlights during the quarter, including crossing the Rs 1 trillion market capitalisation milestone, opening 22 new branches, and winning six awards at the E4M Golden Mikes, such as the Golden Category award for Best Integrated TV Campaign and the Silver Category award for Best Use of Influencers/Celebrities on TV for its ‘Sunheri Soch’ Season 3 campaign.
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