Muthoot Finance tumbles on slower sequential AUM growth despite strong Q1 earnings

Muthoot Finance fell 7.52% to Rs 2,885 after investors reacted to a moderation in sequential loan asset growth despite the company reporting record assets under management.

On a consolidated basis, the company's profit after tax increased 43.1% YoY but declined 16.9% QoQ to Rs 2,824.80 crore in Q1 FY27.

Total income rose 34.5% YoY but fell 6.4% QoQ to Rs 8,694.80 crore in the quarter ended 30 June 2026.

Profit before tax stood at Rs 3,797.10 crore in Q1 FY27, up 43.1% YoY but down 17.2% QoQ.

Total expenses increased 28.5% YoY and 4.0% QoQ to Rs 4,897.70 crore. Finance costs rose 46.9% YoY and 9.6% QoQ to Rs 3,458.40 crore, employee benefit expenses increased 13.2% YoY and 26.7% QoQ to Rs 738.40 crore. Impairment of financial instruments declined 61.0% YoY and 54.8% QoQ to Rs 121.30 crore.

Consolidated loan assets under management (AUM) grew 43% YoY and 5% QoQ to a record Rs 1,91,532 crore. Standalone AUM rose 44% YoY and 6% QoQ to Rs 1,72,053 crore, driven by a 44% increase in gold loan assets to Rs 1,63,298 crore. The company's subsidiaries contributed 12% of consolidated loan assets.

The moderation in sequential AUM growth followed eight quarters of exceptionally strong expansion supported by rising gold prices.

Management said the outlook for gold-backed lending remains encouraging, supported by increasing customer acceptance and growing demand for secured credit.

The company said it continues to invest in digital capabilities to improve customer experience, enhance operational efficiency and enable faster credit delivery. It also expects sustained growth in the gold loan industry, supported by increasing formalisation and rising participation from organised lenders.

Separately, the board of Muthoot Finance has recommended the appointment of Alexander George as managing director with effect from 1 October 2026, subject to shareholders' approval at the upcoming AGM.

George Alexander Muthoot, who has led the company for over three decades, will transition to the role of executive vice chairman, where he will continue to provide strategic guidance and mentor the next generation of leadership.

Alexander George, associated with the company since 2006, has played a key role in expanding Muthoot Finance's branch network, driving digital transformation, strengthening customer outreach and enhancing operational efficiency across North, East and West India. The company said the leadership transition is part of a long-planned succession strategy aimed at ensuring continuity, stability and long-term growth.

Muthoot Finance, an Upper Layer NBFC (NBFC-UL), is India's largest gold loan NBFC, serving over 2,00,000 retail customers every day.

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