Muthoot Finance has delivered strong performance in the quarter, with a 6.5% QoQ and 28% YoY growth in its gold loan portfolio. The company's spreads have improved slightly, thanks to higher yields and controlled operating expenses, resulting in a 26% YoY increase in profit after tax despite higher provisions for gold and personal loan delinquencies.

The company has clarified that gold loan delinquencies are technical, with a loan-to-value ratio of 55% in the NPA segment, while personal loan NPAs are fully provided for. Customer acquisition in the gold loan sector remains strong, with a 4% QoQ increase in active customer count. Muthoot Finance has raised its growth guidance for the standalone book in FY25E to 25%, following an 18% growth in the first half of the fiscal year.

Dolat Capital Market maintains a 'BUY' rating for Muthoot Finance, with a target price of Rs 2150. The valuation is based on 2.5 times the estimated adjusted book value for September 2026, reflecting a return on assets and return on equity of 5.2% and 19% respectively. The firm highlights Muthoot's strong brand recognition, customer-centric approach, and low operating expenses as key strengths.