Muthoot F9M26: All That Glitters is Still Gold
Lim Ze Hao, CFA: Analyst, Financials - CreditSights
Pramod Shenoi: Head of Asia-Pacific Research, Head of Financials - Creditsights
16 February 2026
Insights into Muthoot F9M26: All That Glitters is Still Gold, including:
- Record Financial Results: Discover how Muthoot Finance achieved spectacular F9M26 results with net profit surging 84.5% YoY to INR 72.1 bn, driven by robust AUM growth of 48% YoY and NIM expansion to 12.56%.
- Dominant Gold Loan Portfolio: Learn how Muthoot’s ~90% gold loan concentration delivered exceptional Gold Loan Performance with 11.5% QoQ AUM growth, supported by strong gold price trends and resilient demand amid tighter unsecured lending.
- Benign Asset Quality Metrics: See how Muthoot’s secured lending model delivered credit costs of just 55 bp with a 1.68% GNPA ratio, while the 57% average LTV provides substantial buffer against gold price volatility.
- Regulatory Tailwinds for Expansion: Understand the impact of RBI’s removal of explicit approval requirements for branch expansion beyond 1,000 locations, signaling regulatory comfort and eliminating competitive disadvantages.
- Strong Profitability and Returns: Gauge Muthoot’s impressive returns with ROE surging to 29.0% (+9.8 ppt YoY) and ROA at 6.14% (+132 bp YoY), driven by stellar topline expansion and improved cost-income ratio of 25.7%.
Executive Summary
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Muthoot delivered another blowout quarter with gross AUM growth accelerating to 11.5% QoQ / 48.0% YoY, driven by gold loans at the parent (+11.8% QoQ) and Muthoot Money (+25.2% QoQ).
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F9M26 net profit thus skyrocketed to a record INR 72.1 bn, up 84.5% YoY on the back of stellar topline expansion from robust AUM growth and a higher NIM, as well as lower provisions. Returns surged with ROE at 29.0% (+9.8 ppt YoY) and ROA at 6.14% (+132 bp YoY).
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The NIM rose 13 bp QoQ / 72 bp YoY on recoveries from continued higher collateral sales/NPA write-offs; yields on fresh disbursements were otherwise steady at ~18-19%, and interest spread around 9.5%, in line with management’s target steady state levels.
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Asset quality continued to trend well with credit costs down 29 bp QoQ to a low 55 bp; F9M26 credit costs came at 78 bp (F9M25: 163 bp), supported by brisk loan growth and relatively higher write-offs; the standalone parent’s GNPA ratio dropped 60 bp QoQ to 1.68%. The average LTV of the gold loans portfolio is 57%, and new loans are underwritten at a ceiling of slightly below 75% LTV, which give us comfort around gold price volatility.
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