Jefferies has maintained its buy rating on Muthoot Finance and raised the target price to ₹2,950 from ₹2,660 after the company posted a strong first-quarter performance that beat its estimates. Profit grew 90% year-on-year, driven by interest income writebacks, with the result coming in ahead of expectations. Asset quality also improved, with standalone gross non-performing assets and credit costs falling sequentially.
The brokerage highlighted that favourable gold prices and headroom to lift loan-to-value ratios should support healthy loan growth, while net interest margins are expected to expand as interest rates ease. Jefferies described Muthoot Finance as a defensive play amid rising stress in the broader financial sector, underpinned by the resilience of the gold loan business model. It expects a 23% compound annual growth rate in profits and a return on equity of over 21% between FY26 and FY28, maintaining a positive outlook on the stock.
Disclaimer: The views and recommendations made in this article are those of Jefferies. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
