Muthoot Finance’s gold loan business is holding up strongly, with growth still near 50% year-on-year as rising gold prices lift collateral values. The firm notes a structural slowdown in volumes: gold tonnage is down and active loan accounts have fallen for the second straight quarter. Management says the decline is driven by shorter loan tenures and churn, not weaker demand. Smaller-ticket loans are shrinking while larger loans gain. Tighter unsecured lending also funnels borrowers toward gold-backed credit.
Muthoot Finance shares fell over 8% on Friday even after the gold loan lender reported a 105% year-on-year jump in Q4 standalone net profit to Rs 3,086 crore. Revenue from operations rose 68.5% to nearly Rs 8,180 crore, while full-year profit climbed 95% to Rs 10,134 crore and gold loan AUM surged 50% to Rs 1.54 lakh crore. Jefferies and Morgan Stanley retained positive ratings, but adjusted targets, citing margin strength, churn signals, and gold price expectations.
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