Muthoot Finance Shares Surge 11% on Strong Q1 Earnings, Gold Loan Demand

Muthoot Finance Ltd. shares rallied more than 11% to a record high after reporting a 65% year-on-year jump in consolidated net profit for the June quarter. The gold-loan focused non-bank lender posted a 90% surge in net income to ₹2,406 crore ($288 million), fueled by rising Gold prices and constrained availability of unsecured credit across the industry.

Brokerages turned bullish, with Morgan Stanley upgrading the stock to overweight and Jefferies maintaining its buy rating. Both firms raised price targets, citing improved asset quality and robust growth in gold loans. The company's non-gold portfolio remains stable at 13-14% of total assets, with management targeting 15-20% in coming quarters.

Gold's rally to near-record prices has created tailwinds for lenders specializing in bullion-backed financing. Muthoot's performance reflects broader trends in alternative credit markets as traditional lenders tighten unsecured loan disbursals.