Muthoot Finance shares fall 8% on weak Q4 metrics, customer decline
Synopsis
Muthoot Finance's March quarter told two stories: a 50% AUM surge and ₹3,086 crore profit on one hand, and a second straight quarter of customer attrition with gold tonnage down 4% on the other. Jefferies' ₹400 target-price cut signals that the market is choosing to believe the operational story over the headline numbers — and the stock's 8% single-day drop confirms that view.
Key Takeaways
Muthoot Finance shares fell 8.12 per cent intraday on 15 May , touching ₹3,242.20 on the BSE .
Active customers declined 2 per cent quarter-on-quarter — the second consecutive quarterly drop in the low-ticket borrower segment.
Gold tonnage fell 4 per cent sequentially to 196 tonnes in the March quarter.
Net profit stood at ₹3,086 crore ; gold loan AUM jumped 50 per cent year-on-year to ₹1,54,084 crore .
Jefferies cut its target price by ₹400 to ₹4,350 , citing operational concerns.
The board approved a record interim dividend of ₹30 per share (300%) for FY26 .
Muthoot Finance shares dropped over 8 per cent on Friday, 15 May after the gold loan non-banking financial company (NBFC) posted a mixed March quarter performance — strong profit growth overshadowed by falling active customers, declining gold tonnage, and rising asset quality concerns.
Market Reaction
On the BSE, the stock hit an intraday low of ₹3,242.20, down 8.12 per cent, before paring some losses to trade at ₹3,290 — still 6.77 per cent below its previous close. The stock has now declined more than 10 per cent year-to-date and around 8 per cent over the past one month. Its 52-week high stands at ₹4,149, while its 52-week low is ₹2,028.10 on the BSE.
Key Operational Concerns
The quarterly report flagged a 2 per cent quarter-on-quarter decline in active customers — the second consecutive quarter of weakness in the low-ticket borrower segment. Gold tonnage, a closely watched indicator of the quantity of gold pledged by customers, fell 4 per cent sequentially to 196 tonnes during the quarter. Analysts noted that these operational metrics signal stress at the base of Muthoot's lending pyramid, where smaller borrowers are either exiting or not renewing loans.
Financial Performance: The Other Side
Despite the operational headwinds, Muthoot Finance delivered robust headline financials. Standalone net interest income surged to ₹5,194 crore, while net profit stood at ₹3,086 crore. Gold loan assets under management (AUM) jumped 50 per cent year-on-year to ₹1,54,084 crore, and net interest margin improved sequentially to 13.38 per cent from 12.77 per cent. However, asset quality concerns persisted, with impairments rising alongside the customer attrition trend.
Jefferies Cuts Target Price
Global brokerage Jefferies responded by trimming its target price on the stock by 8 per cent — a cut of ₹400 — to ₹4,350 from ₹4,750. The revision reflects concern that the operational deterioration could weigh on future earnings growth even if near-term margins remain elevated. This comes amid a broader regulatory environment where the Reserve Bank of India (RBI) has been tightening norms around gold loan NBFCs.
Dividend Declared
Earlier in April, Muthoot Finance's board approved its highest-ever interim dividend of ₹30 per equity share for FY26, translating to a payout at 300 per cent of face value — a signal of balance-sheet confidence even as operational metrics soften. The dividend approval was disclosed via an exchange filing.
With borrower attrition accelerating and a top brokerage cutting its target, the near-term trajectory of the stock will likely hinge on whether management can reverse the customer decline in the June quarter.
Point of View
The low-ticket borrower is both the growth engine and the early-warning system — when they leave, it often precedes broader portfolio stress. Jefferies' target cut is measured, but the real risk is whether the customer decline is cyclical or structural, a question management has not yet answered convincingly. The record dividend, while shareholder-friendly, also raises the question of whether capital is being returned because deployment opportunities at the base of the pyramid are shrinking.
NationPress
5 Aug 2026
Frequently Asked Questions
Why did Muthoot Finance shares fall today?
Muthoot Finance shares fell over 8 per cent on 15 May after its March quarter results revealed a second consecutive decline in active customers and a 4 per cent sequential drop in gold tonnage, raising concerns about operational health despite strong profit numbers. Global brokerage Jefferies also cut its target price on the stock by ₹400 to ₹4,350.
What were Muthoot Finance's Q4 financial results?
Muthoot Finance reported standalone net interest income of ₹5,194 crore and a net profit of ₹3,086 crore for the March quarter. Gold loan AUM rose 50 per cent year-on-year to ₹1,54,084 crore, and net interest margin improved to 13.38 per cent from 12.77 per cent sequentially.
What is gold tonnage and why does its decline matter?
Gold tonnage refers to the total quantity of gold pledged by customers as collateral for loans — a key volume indicator for gold loan NBFCs like Muthoot Finance. A 4 per cent sequential decline to 196 tonnes in Q4 suggests fewer customers are pledging gold, pointing to weakening demand or rising competition in the segment.
What dividend did Muthoot Finance declare?
Muthoot Finance's board approved its highest-ever interim dividend of ₹30 per equity share for FY26, equivalent to a 300 per cent payout on face value. The decision was disclosed through an exchange filing in April.
How has Muthoot Finance stock performed this year?
The stock has declined more than 10 per cent year-to-date and around 8 per cent over the past one month as of 15 May. Its 52-week high on the BSE is ₹4,149, while its 52-week low is ₹2,028.10.
