Muthoot Finance Q2 profit rises 27%; raises gold loan AUM growth guidance to 25%

The company's standalone assets under management (AUM) grew 42% to an all-time high of ₹1.87 lakh crore. Gold loan AUM, which accounts for the bulk of its portfolio, rose 43% to ₹1.78 lakh crore. The strong growth prompted the lender to raise its gold loan AUM growth guidance for FY27 by an additional 10%. “We are also revising our gold loan growth guidance for FY27 upward by an additional 10%,” said Alexander George Muthoot, managing director, Muthoot Finance.

He added that the RBI's revised gold lending guidelines, which came into effect on April 1, involve a learning curve for both the lender and its customers. The process is expected to stabilise over the next few quarters, irrespective of the growth trajectory. In the previous quarter, Muthoot Finance had guided for 15% AUM growth in FY27, in line with its practice of providing conservative estimates at the beginning of the financial year, with scope for upward revisions in subsequent quarters.

On a consolidated basis, net profit rose 16% year-on-year to ₹3,278 crore, while AUM increased 42% to a record ₹2.09 lakh crore. The consolidated numbers include the performance of subsidiaries Muthoot Homefin, Belstar Microfinance and Muthoot Insurance Brokers. Among the subsidiaries, Belstar Microfinance's loan AUM remained largely flat at ₹7,876 crore, compared with ₹7,842 crore in the previous quarter.

Muthoot Money, the group's gold loan subsidiary, reported an increase in AUM to ₹12,716 crore from ₹10,550 crore in Q1FY27. Muthoot Finance accounted for 88% of the group's consolidated AUM as of September-end. Shares of Muthoot Finance closed 4% lower at ₹2,408.60 on Friday, ahead of the results announcement on Saturday.