CLSA has raised its target prices on gold financiers Muthoot Finance and Manappuram Finance, retaining its outperform ratings on both counters. The brokerage now values Muthoot at ₹3,600 per share and Manappuram at ₹310, supported by strong tailwinds from the sharp surge in gold prices, which rose 20% sequentially in the June quarter — the steepest increase in several quarters.
The firm noted that both Muthoot and Manappuram had loan-to-value (LTV) ratios of 62% and 57%, respectively, at end-June, well below their long-term averages, providing ample headroom for growth. The Reserve Bank of India’s recent approval for lenders to increase LTV on lower-ticket gold loans further enhances growth prospects.
CLSA projects Muthoot to deliver 23% compound annual growth in assets under management (AUM) and 37% growth in profit after tax (PAT) over FY25–27, with earnings estimates raised by 10–15%. For Manappuram, however, the brokerage trimmed PAT estimates by 7–13% for FY26–27 due to lower net interest margins, though FY28 earnings were left unchanged.
Overall, CLSA believes steady tonnage growth, gradual LTV expansion, and favourable gold price trends will underpin the performance of gold financiers, positioning them well for medium-term growth.
Disclaimer: The views and recommendations above are those of CLSA. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.