Muthoot Finance FY26 PAT Surges 98%; Dividend Declared
Muthoot Finance reported a 98% YoY surge in consolidated PAT to ₹106,069 Mn for FY26, while standalone PAT grew 95% to ₹101,341 Mn. The board declared a dividend of ₹30 per share.
*this image is generated using AI for illustrative purposes only.
Muthoot Finance Limited has released the transcript of the analyst call conducted on May 14, 2026, regarding the audited standalone and consolidated financial results for Q4 and FY 2026. The company's consolidated Profit After Tax (PAT) nearly doubled, rising 98% year-on-year (YoY) to ₹106,069 Mn, while standalone PAT grew 95% YoY to ₹101,341 Mn. The board has declared a dividend of 300%, or ₹30 per share, marking the 14th consecutive year of dividend distribution since its IPO in 2011.
Analyst Views: Multiple Brokerages Maintain Positive Ratings
Following the strong Q4 results, multiple global brokerages have reaffirmed their positive outlook on Muthoot Finance. The following table summarises the latest analyst recommendations:
| Brokerage: | Rating | Target Price | Key Rationale |
|---|---|---|---|
| CLSA: | Outperform | ₹4,600 | 30% Q4 PAT beat; stronger NII; higher LTV-driven AUM growth; FY27 PAT estimates raised 15% |
| Morgan Stanley: | Overweight | ₹4,330 | Strong Q4 PAT beat; attractive valuations for a high-quality defensive business; gold loan growth lagged gold prices and peers |
| Jefferies: | Buy | ₹4,350 | Strong Q4 profit beat on better margins and yields; healthy AUM growth; 15% EPS CAGR and 25% ROE expected over FY26–28 |
| Bernstein: | Outperform | ₹4,500 | Strong Q4 on gold price rally; NIM expansion via higher loan yields; rise in Stage 2/3 loans due to regulatory classification changes |
Key Financial Highlights at a Glance
The following table summarises the company's key standalone metrics for FY 2026:
| Metric: | Value |
|---|---|
| Net Worth: | ₹37,742 Cr |
| Capital Adequacy Ratio: | 20.75% |
| Active Customers: | 6.41 Mn |
| Earnings Per Share (Basic): | ₹252.43 |
| Book Value Per Share: | ₹940.05 |
| Return on Equity: | 30.63% |
| Dividend Per Equity Share: | 300% at ₹30 |
| Market Capitalisation (Mar 31, 2026): | ₹1,268,681 Mn |
Consolidated Financial Performance
Muthoot Finance delivered robust consolidated results for FY 2026, with total income rising 54% YoY to ₹312,634 Mn and Profit Before Tax (PBT) growing 97% YoY to ₹143,048 Mn. The group's branch network expanded to 7,568 branches, up from 7,391 in FY 2025. The consolidated Loan AUM of the group grew 49% YoY to ₹1,819,165 Mn.
| Metric (₹ in Mn): | FY 2026 | FY 2025 | YoY (%) |
|---|---|---|---|
| Total Income: | 312,634 | 202,651 | 54 |
| Finance Cost: | 109,996 | 74,123 | 48 |
| Impairment of Financial Instruments: | 10,261 | 15,756 | (35) |
| Employee Benefit Expenses: | 27,911 | 23,250 | 20 |
| Total Expenses: | 169,586 | 129,991 | 30 |
| Profit Before Tax: | 143,048 | 72,660 | 97 |
| Profit After Tax: | 106,069 | 53,524 | 98 |
| EPS – Basic (₹): | 263.79 | 132.84 | 99 |
| EPS – Diluted (₹): | 263.79 | 132.83 | 99 |
On a quarterly basis, consolidated PAT for Q4 FY 2026 stood at ₹33,975 Mn, compared to ₹28,235 Mn in Q3 FY 2026, ₹24,117 Mn in Q2 FY 2026, and ₹19,742 Mn in Q1 FY 2026.
Standalone Financial Performance
On a standalone basis, Muthoot Finance reported total income of ₹275,999 Mn for FY 2026, up 61% YoY. Interest income grew 60% YoY to ₹270,665 Mn. Total expenses rose 39% YoY to ₹139,544 Mn, while PBT surged 93% YoY to ₹136,455 Mn. For Q4 specifically, standalone net profit came in at ₹30.8B versus ₹15.1B in the same period last year, while Q4 standalone revenue stood at ₹81.8B compared to ₹48.54B YoY.
| Metric (₹ in Mn): | FY 2026 | FY 2025 | YoY (%) |
|---|---|---|---|
| Interest Income: | 270,665 | 168,770 | 60 |
| Other than Interest Income: | 5,334 | 2,581 | 107 |
| Total Income: | 275,999 | 171,351 | 61 |
| Finance Cost: | 99,410 | 64,288 | 55 |
| Employee Benefit Expense: | 18,248 | 14,506 | 26 |
| Impairment on Financial Instruments: | 4,698 | 7,459 | (37) |
| Total Expenses: | 139,544 | 100,645 | 39 |
| Profit Before Tax: | 136,455 | 70,706 | 93 |
| Profit After Tax: | 101,341 | 52,008 | 95 |
Standalone PAT for Q4 FY 2026 was ₹30,862 Mn, compared to ₹26,564 Mn in Q3 FY 2026, ₹23,452 Mn in Q2 FY 2026, and ₹20,463 Mn in Q1 FY 2026.
Loan AUM and Asset Quality
Muthoot Finance's standalone Loan AUM grew 50% YoY to ₹1,628,259 Mn as of March 2026, with Gold Loan AUM at ₹1,540,843 Mn. The company held 196 tonnes of gold as security. On an asset quality basis, Q4 Gross Non-Performing Assets (GNPA) rose to 2.35% from 1.58% on a quarter-on-quarter (QoQ) basis, while Net NPA (NNPA) increased to 2.04% from 1.30% QoQ. The Stage III loan assets stood at 2.35% of total loan assets, improving from 3.41% in March 2025, and ECL provision as a percentage of loan assets improved to 1.10% from 1.45%.
| Metric: | Q4 FY26 | Q3 FY26 (QoQ) | Mar-25 |
|---|---|---|---|
| GNPA (%): | 2.35% | 1.58% | 3.41% |
| NNPA (%): | 2.04% | 1.30% | — |
| Standalone Loan AUM (₹ in Mn): | 1,628,259 | — | 1,086,478 |
| Gold Loan AUM (₹ in Mn): | 1,540,843 | — | 1,029,559 |
| Gold Held as Security (Tonnes): | 196 | — | 208 |
| No. of Loan Accounts (Mn): | 10.36 | — | 10.23 |
| No. of Active Customers (Mn): | 6.41 | — | 6.37 |
| ECL Provision as % of Loan Assets: | 1.10% | — | 1.45% |
Key profitability ratios on a standalone basis showed strong improvement, with Net Interest Margin (NIM) rising to 12.75% in FY 2026 from 11.45% in FY 2025, and PAT to average loan assets improving to 7.55% from 5.70%.
Subsidiary Performance and Guidance
Management highlighted stable performance across subsidiaries. Belstar Microfinance ventured into the gold loan business, opening 81 branches, and achieved a collection efficiency of 99.85%. Muthoot Home Finance reported a loan AUM of ₹3,485 Cr, a 17% growth, with a PAT of ₹45 Cr. Muthoot Money shifted focus to gold loans, reporting an AUM of ₹9,794 Cr, a 151% growth, and a PAT of ₹338 Cr. The company provided an initial AUM growth guidance of 15% for the upcoming fiscal year.
Historical Stock Returns for Muthoot Finance
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.34% | -2.68% | -6.01% | -14.48% | +44.03% | +112.89% |
With GNPA rising sharply to 2.35% from 1.58% QoQ despite regulatory reclassification, how might sustained elevated NPA levels impact Muthoot Finance's credit ratings and borrowing costs in FY27?
Given that Muthoot Finance's AUM growth guidance of 15% for FY27 is significantly lower than the 50% growth achieved in FY26, what key risks—such as gold price corrections or RBI regulatory tightening on gold loans—could prevent even this conservative target from being met?
As Belstar Microfinance expands into gold loans and Muthoot Money pivots entirely toward gold lending, how could increased intra-group competition and strategic overlap affect consolidated margins and capital allocation efficiency?
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