Muthoot Finance Shares Plunge 10% on Q1 Results Disappointment

Shares of gold financier Muthoot Finance Ltd fell as much as 10% on Monday, August 3, following its June quarter results. The numbers revealed margin compression due to yield normalization, rollover to lower rate slabs, and price cuts caused by competition.

Jeeferies downgraded the stock to 'hold' from 'buy', cutting its price target to ₹3,300 from ₹4,350 earlier. The brokerage cited customer additions picking up for Muthoot Finance, but still believes competition and rangebound gold prices will weigh on Earnings per Share (EPS) growth in financial year 2027.

Despite the downgrades, not all analysts share this view. Bernstein maintained its 'outperform' rating with a price target of ₹4,500, citing healthy gold loan AUM growth during the quarter as overshadowed by a sharp 300 basis points contraction in margins.