Muthoot Finance shares fall 5% today despite strong Q4 profit beat as FY27 growth concerns weigh

Shares of Muthoot Finance declined 5.03% to Rs 3,353.50 on the NSE on Friday, May 15, even after the company reported a strong Q4 FY26 performance and received bullish ratings from several brokerages.

The stock fell Rs 177.60 from its previous close of Rs 3,531.10. During the session, it touched an intraday low of Rs 3,305.10 and a high of Rs 3,523.90. The stock’s 52 week range stands between Rs 2,027 and Rs 4,149.50.

The fall came despite Muthoot Finance reporting standalone profit after tax of Rs 3,080 crore in Q4 FY26, up 105% year on year. Standalone assets under management rose 50% YoY, supported by higher gold prices and elevated loan to value levels.

Net interest margin improved to 20.8%, aided by higher loan yields, while return on equity rose to 34%. However, investors appeared to focus on signs of moderation ahead, with management guiding for 15% AUM growth in FY27, sharply lower than the 50% growth seen in Q4 FY26.

Gold loan tonnage declined 4% sequentially after a 2% decline in Q3 FY26, indicating slower volume growth despite higher value growth. Customer count also fell 2% sequentially due to churn in the lower ticket loan segment.

Stage 2 and Stage 3 loans increased during the quarter, although management clarified that the rise was largely due to RBI mandated borrower level classification changes rather than actual asset quality deterioration.

Brokerages, however, largely remained positive on the stock. Bernstein maintained an Outperform rating with a target price of Rs 4,500, while Morgan Stanley retained its Overweight rating with a target price of Rs 4,330. CLSA maintained its Outperform rating with a target price of Rs 4,600, and Jefferies retained its Buy call with a target price of Rs 4,350.

The stock reaction appears to reflect concerns over whether the exceptional Q4 performance can be sustained in FY27, especially if gold prices correct and AUM growth slows. While brokerages remain structurally positive, the market seems to be pricing in near term risks linked to slower loan growth, reduced gold price tailwinds and elevated expectations after the recent rally.

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