Gold prices are at record highs and gold financier stocks also got their highest price target

Shares of gold financiers Manappuram Finance Ltd. and Muthoot Finance Ltd. gained up to 2% on Wednesday, October 1, after brokerage firm CLSA reiterated their positive stance on both these stocks, but raised their price targets.

CLSA raised its target on Muthoot Finance to ₹3,600 from ₹2,740 earlier, while for Manappuram, the price target was raised to ₹310 from ₹260 earlier.

This is the highest price target on the street for both Manappuram and Muthoot.

CLSA wrote in its note that gold prices have risen 20% sequentially, marking their sharpest quarterly increase in several quarters. It noted that the Loan-To-Value (LTV) ratio for Muthoot and Manappuram stood at 62% and 57% respectively at the end of June, which is below their long-term averages.

With the Reserve Bank of India allowing lenders to increase LTV on lower-ticket gold loans, CLSA expects stronger growth ahead.

The brokerage said a combination of sharply higher gold prices, gradual LTV increases, and steady tonnage growth has led it to meaningfully raise its AUM growth estimates for both these companies.

CLSA now expects Muthoot to deliver a 23% compound annual growth rate (CAGR) in AUM and 37% CAGR in profit after tax (PAT) over financial year 2025-2027, and it has also upgraded its PAT estimates for the company by 10% – 15%.

For Manappuram, however, CLSA has trimmed financial year 2026 and 2027 PAT estimates by 7% and 13% respectively due to lower net interest margins, while estimates for financial year 2028 remain largely unchanged.

Shares of Manappuram Finance ended 1.8% higher at ₹286, while those of Muthoot ended 2% higher at ₹3,139.

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