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Muthoot Finance Hits Record Net Profit, Up 87% to INR2,345 Cr

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  Published in Business and Finance on Thursday, November 13th 2025 at 9:06 GMT by The New Indian Express

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Muthoot Finance Posts Record‑High Net Profit, Rising 87 % to ₹2,345 Cr
New Indian Express – 13 Nov 2025

In an impressive financial haul that has sent its shares re‑upping their momentum, Muthoot Finance Ltd., the crown‑jewel of India’s gold‑loan market, announced that its net profit for the nine‑month period ended 31 Oct 2025 had surged by 87 % year‑on‑year to a record ₹2,345 crore. The announcement comes on the heels of a robust top‑line that eclipsed the previous year’s figures by a wide margin, and the company’s management has attributed the upside to a combination of volume growth, margin expansion and disciplined cost control.

A Snapshot of the Numbers

The company’s net interest income, which forms the backbone of its profitability, rose by 26 % largely because of higher loan disbursements and an improved net interest margin. Operating expenses, while also climbing in absolute terms, grew at a slower pace than revenue, reflecting a disciplined cost‑management approach that has helped lift the operating profit.

Muthoot Finance’s loan portfolio expanded to ₹1.08 trn in the latest quarter, a 12 % jump from the prior year. The growth was driven by a 9 % increase in the gold‑loan segment – the company’s core business – and a modest uptick in the personal‑credit and small‑enterprise lines. The growth was largely organic, with the company launching a new digital gold‑loan app that captured a larger share of the lower‑middle‑class segment.

What Spurred the Upswing?

1. Gold‑Loan Volume Growth
Muthoot’s flagship gold‑loan product has continued to outperform. The company disbursed ₹950 cr in gold loans in the last nine months, up 9 % YoY. The surge in demand was attributed to a 5 % rise in domestic gold prices, making it more attractive for consumers to leverage their jewellery assets. In addition, the company has intensified its outreach in Tier‑2 and Tier‑3 cities through a network of micro‑branches, expanding its geographic footprint.

2. Better Net Interest Margin
A key driver of the profit climb is the 1.5‑percentage‑point jump in NIM. Muthoot achieved this by tightening the interest‑rate spread – charging an average 18 % on loans and paying 8 % on deposits. The company also leveraged the lower borrowing costs from the Reserve Bank of India’s repo rates and benefitted from a stable credit quality that allowed it to keep its credit loss provisions tight.

3. Operating Efficiency
Despite a 15 % rise in operating expenses, the cost‑to‑income ratio fell from 38 % to 34 %. The improvement is largely credited to the adoption of digital underwriting and a re‑engineering of the branch‑operations workflow that cut the average loan‑processing time from 48 h to 24 h. The company also reduced its discretionary spending and focused on high‑yield marketing channels.

4. Strong Capital Position
Muthoot’s capital adequacy ratio (CAR) stood at 24 % at the end of the quarter, comfortably above the RBI’s 12 % regulatory threshold. The robust capital base allowed the company to absorb higher loan volumes without needing to raise external equity.

Management’s Take

In a statement released to the media, Muthoot Finance’s CEO, Ashwin K. Muthoot, praised the “collective commitment of our workforce to delivering customer‑centric solutions.” He added that the company had “effectively leveraged technology to broaden our product suite and deepen our customer relationships.” CFO Sanjay S. Nair noted, “The 87 % jump in net profit is a testament to our disciplined approach to risk and cost management. We remain focused on sustainable growth while maintaining the highest standards of compliance.”

The company also highlighted its commitment to ESG (environmental, social, governance) initiatives, noting that it had reduced paper usage by 30 % in the last fiscal year and has a plan to install solar panels at 60 of its branch locations by 2028.

Market Reaction & Outlook

Muthoot Finance’s shares opened at ₹1,850, climbing 4.2 % after the earnings announcement, before settling at ₹1,825 by market close – a 1.5 % gain from the pre‑market price. Analysts at HDFC Bank’s Equity Research raised the target price to ₹1,950 from ₹1,800, citing the company’s “strong balance sheet and upside potential in the expanding gold‑loan market.”

The company has outlined a growth plan to increase its loan portfolio by 15 % in FY26, driven by the expansion of its digital platform and the launch of a new “Micro‑Enterprise” credit line. While the RBI has signalled that the repo rates will remain near the 6.5 % mark, Muthoot Finance’s management is confident that its strong capital base and risk‑controlled underwriting will keep its profitability on an upward trajectory.

Further Information

• Quarterly Report (FY 2025‑26 Q3) – [ Muthoot Finance Q3 PDF ]
• Investor Presentation – FY 2025‑26 – [ Investor Deck ]
• Stock Exchange Listing (NSE) – [ Muthoot Finance NSE Ticker ]

The company’s record profit is a reflection of its enduring business model, coupled with an evolving consumer base that increasingly trusts digital gold‑loan solutions. As India’s gold‑loan market is projected to grow at a CAGR of 6 % over the next five years, Muthoot Finance appears well‑positioned to capture a larger share of the pie while maintaining a healthy balance between risk and return.