What is the story about?
Shares of Muthoot Finance Ltd. are at record high levels on Wednesday, December 23, as the rally in Gold prices globally is fueling an upmove in the stock.
The stock is now up 81% so far in 2025, which is the best calendar year return that the stock has had since its listing in 2011, surpassing the 78% return it delivered in 2014.
This will also be the third consecutive year of positive returns for the stock, having gained 44% last year and 39% in 2023. In fact, starting 2016, the stock has delivered negative annual returns only once.
Global gold prices have surged to record high levels led by renewed geopolitical tensions between the US and Venezuela, hopes of further easing by a more dovish Federal Reserve when a new Chair takes charge in 2026, robust ETF inflows, and continued buying from global central banks.
Prices in the Indian markets are also at record highs with the price of gold futures on the MCX nearing levels of ₹1.4 lakh per 10 grams.
For the most recent quarter, Muthoot Finance's profit increased by nearly 90%, while its Net Interest Income or core income grew by nearly 60% from last year.
At the end of the September quarter, the assets under management (AUM) for the Gold loan business grew to ₹1.24 lakh crore, which is well over 90% of the consolidated AUM of ₹1.47 lakh crore.
The management had also revised its growth outlook for the year higher to between 30% to 35% from 15% earlier.
Brokerage firm Jefferies maintained its "buy" rating on Muthoot Finance with a price target of ₹4,000, saying it expects Muthoot's margins to expand, with easing credit costs.
Shares of Muthoot Finance are now at the day's high, trading 1.9% higher at ₹3,879. The stock is up for the fifth straight month in December.
The stock is now up 81% so far in 2025, which is the best calendar year return that the stock has had since its listing in 2011, surpassing the 78% return it delivered in 2014.
This will also be the third consecutive year of positive returns for the stock, having gained 44% last year and 39% in 2023. In fact, starting 2016, the stock has delivered negative annual returns only once.
Global gold prices have surged to record high levels led by renewed geopolitical tensions between the US and Venezuela, hopes of further easing by a more dovish Federal Reserve when a new Chair takes charge in 2026, robust ETF inflows, and continued buying from global central banks.
Prices in the Indian markets are also at record highs with the price of gold futures on the MCX nearing levels of ₹1.4 lakh per 10 grams.
For the most recent quarter, Muthoot Finance's profit increased by nearly 90%, while its Net Interest Income or core income grew by nearly 60% from last year.
At the end of the September quarter, the assets under management (AUM) for the Gold loan business grew to ₹1.24 lakh crore, which is well over 90% of the consolidated AUM of ₹1.47 lakh crore.
The management had also revised its growth outlook for the year higher to between 30% to 35% from 15% earlier.
Brokerage firm Jefferies maintained its "buy" rating on Muthoot Finance with a price target of ₹4,000, saying it expects Muthoot's margins to expand, with easing credit costs.
Shares of Muthoot Finance are now at the day's high, trading 1.9% higher at ₹3,879. The stock is up for the fifth straight month in December.
