Muthoot Finance’s stock dropped over 11% on February 13, 2026, marking its largest single-day decline since August 2022, despite a near-doubling of quarterly profit reported the previous day.
Earnings Breakdown
The gold loan provider posted robust Q3 FY26 results, with net profit surging 95% year-on-year to contribute to 91% growth over nine months, driven by 50% loan AUM expansion to ₹1,47,552 crore.
However, analysts highlighted that much of the profit stemmed from one-time interest income write-backs on recovered loans, masking sequential weakness in core net interest margins and slower active customer growth.
Market Reaction
Shares traded as low as ₹3,577, closing around ₹3,620.6 after opening at ₹3,870, with high volume of over 3.3 million shares reflecting investor sell-off.
Brokerages like Motilal Oswal stayed neutral, citing stable NIMs at 11.85% and better NPA recoveries, while Nuvama noted positives in AUM growth and lower GS3 ratios.
Analyst Outlook
Despite the dip, some firms remain optimistic on Muthoot’s rural gold loan dominance and asset quality improvements, though concerns linger over dependency on recoveries and competitive pressures in the NBFC space.
The stock’s P/E ratio stands at 19.84, with market cap near ₹1.45 lakh crore, positioning it for potential rebound if core growth sustains.
