Jefferies has maintained its Buy rating on Muthoot Finance with a target price of ₹4,750, following a strong third-quarter performance.
The brokerage noted that Q3 PAT grew 98% year-on-year to ₹27 billion, ahead of its estimate of ₹23 billion, supported by interest income write-backs. Standalone AUM rose 51% YoY, although it missed estimates due to lower loan-to-value (LTV) ratios and a sequential dip in tonnage.
Core NIMs declined sequentially, but operating expenses as a percentage of AUM and credit costs surprised positively. Jefferies believes strong gold prices, LTV buffer and easing of branch expansion norms should support healthy AUM growth.
Combined with steady NIMs, lower opex/AUM and controlled credit costs, the brokerage projects a 17% EPS CAGR and 25%+ ROE over FY26–28E.
Disclaimer: The views expressed above are those of Jefferies and do not represent the views of Business Upturn. This article is for informational purposes only and does not constitute investment advice.
