CLSA has reiterated its outperform rating on Muthoot Finance and raised its target price to ₹4,000 per share after the company posted a strong Q2FY26 across all key operating metrics.
Net interest income beat expectations by 11%, while PPOP and PAT exceeded estimates by roughly 23%. The quarter saw robust gold loan momentum, with the book rising 10% sequentially and 47% YoY to ₹1.32 trillion.
NIM expanded 50 bps to 12.7%, driven by recoveries from GNPL write-backs and a lower cost of funds. CLSA said the cost-to-income ratio declined more than 100 bps QoQ due to favourable operating leverage, while Stage 2 and Stage 3 assets improved by 80 bps.
The brokerage expects a 25% AUM CAGR over FY25–27, supported by strong customer demand, firm gold prices, and Muthoot’s market leadership.
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.
