💰 Financial Performance

Revenue Growth by Segment

Consolidated Loan Assets Under Management (AUM) grew 42% YoY to INR 1,47,673 Cr in H1 FY26. Standalone Gold Loan AUM increased by INR 11,723 Cr in Q2 FY26, a 10% QoQ growth. Muthoot Homefin revenue grew 44% YoY to INR 222 Cr in H1 FY26. Asia Asset Finance (Sri Lanka) revenue increased 40% YoY to LKR 440 million. Muthoot Money AUM grew significantly from INR 2,491 Cr to INR 6,393 Cr.

Geographic Revenue Split

South India remains the primary region, accounting for 58% of branches as of June 30, 2025. However, geographic diversification has reduced South India's share of the gold loan portfolio to 48% in June 2025, down from 86% in fiscal 2007, mitigating regional economic disruption risks.

Profitability Margins

Standalone Profit After Tax (PAT) for H1 FY26 was INR 4,391 Cr, an 88% increase from INR 2,330 Cr YoY. Consolidated PAT for H1 FY26 stood at INR 4,386 Cr, up 74% YoY. Consolidated Return on Managed Assets (RoMA) was 4.7% in fiscal 2025 compared to 5.1% in fiscal 2024, reflecting high but slightly moderating profitability due to microfinance headwinds.

EBITDA Margin

Core profitability remains healthy with a consolidated RoMA of 4.7% in FY25. Standalone PAT for Q2 FY26 rose 87% YoY to INR 2,345 Cr. Profitability is driven by high yields on gold loans and low ultimate credit losses due to the liquid nature of gold collateral.

Capital Expenditure

Not explicitly disclosed as a single CAPEX figure, but the company expanded its physical footprint by opening 23 new gold loan branches under the Belstar subsidiary in H1 FY26 to diversify product offerings.

Credit Rating & Borrowing

Muthoot Finance maintains a strong credit profile with [ICRA]AA+ (Stable) for long-term debt and [ICRA]A1+ for commercial paper. The company raised INR 35,175 Cr from various avenues since April 2025, maintaining a liquidity balance of INR 10,714.6 Cr as of September 30, 2025.

⚙️ Operational Drivers

Raw Materials

Household Gold Jewellery (collateral) represents 100% of the security for the primary gold loan business; Financial Capital (borrowings) is the primary input cost.

Import Sources

Sourced domestically from retail customers across India through a network of 5,000+ branches.

Key Suppliers

Not applicable as a financial services firm; primary 'suppliers' are retail depositors and institutional lenders including banks and NCD investors.

Capacity Expansion

Current branch network is concentrated in South India (58%); expansion is focused on non-gold segments and diversifying gold loan branches into Northern and Western India. Belstar opened 23 new gold loan branches in H1 FY26.

Raw Material Costs

Interest expense is the primary cost of 'raw material' (capital). The company raised INR 35,175 Cr recently at competitive rates. Cost of funds is managed through a mix of NCDs, bank loans, and commercial paper.

Manufacturing Efficiency

Operational efficiency is reflected in a low consolidated gearing of 3.27x as of September 2025 and a standalone Tier I capital adequacy ratio of 21.96%, providing a significant buffer for growth.

Logistics & Distribution

Distribution is handled through a massive physical branch network; South India accounts for 58% of the branch infrastructure.

📈 Strategic Growth

Expected Growth Rate

42%

Growth Strategy

Growth is driven by a dual strategy: maintaining leadership in the core gold loan market (47% YoY AUM growth) and aggressive diversification into subsidiaries. Muthoot Money (vehicle/gold) AUM grew 156% YoY. Belstar Microfinance is diversifying into gold loans (23 new branches) to mitigate microfinance sector volatility.

Products & Services

Gold loans, affordable housing finance, microfinance, vehicle finance, insurance brokerage, and asset management services.

Brand Portfolio

Muthoot Finance, Muthoot Homefin, Belstar Microfinance, Muthoot Money, Muthoot Blue.

New Products/Services

Belstar Microfinance is introducing gold loans (40% non-microfinance portfolio allowed by RBI) to stabilize earnings. Muthoot Money has expanded into vehicle and gold loans, reaching an AUM of INR 6,393 Cr.

Market Expansion

Targeting non-South regions to reduce geographic concentration from the current 58% branch share. Expanding international presence through Asia Asset Finance in Sri Lanka (48% AUM growth).

Market Share & Ranking

Muthoot Finance is the largest gold financing NBFC in India with a consolidated AUM of INR 1,47,673 Cr.

Strategic Alliances

Muthoot Finance holds 66.13% in Belstar Microfinance and 72.9% in Asia Asset Finance (Sri Lanka).

🌍 External Factors

Industry Trends

The gold loan industry is seeing increased regulatory scrutiny (RBI circular Sep 2024) and competition from banks. However, the shift toward organized lending and financial inclusion provides a structural tailwind for the 20-25% growth seen in non-gold segments.

Competitive Landscape

Faces competition from specialized NBFCs (Manappuram) and aggressive entry by commercial banks into the gold loan space.

Competitive Moat

The moat is built on an 85-year brand legacy, a vast branch network that provides 'neighborhood' access for gold storage, and a specialized ability to appraise and liquidate gold collateral quickly. This is sustainable due to the high trust required in gold handling.

Macro Economic Sensitivity

Highly sensitive to gold price fluctuations and rural income levels, as gold loans are often used as working capital by small businesses.

Consumer Behavior

Shift toward using gold loans for immediate liquidity needs rather than traditional moneylenders; increasing acceptance of housing and vehicle finance in semi-urban areas.

Geopolitical Risks

Operations in Sri Lanka are subject to local economic and political stability; South Indian concentration (58% branches) exposes the company to regional disruptions.

⚖️ Regulatory & Governance

Industry Regulations

RBI circular (September 2024) mandates a comprehensive review of gold loan policies and corrective measures within 3 months to address vulnerabilities in processes and practices.

Environmental Compliance

Revised reporting on environmental parameters in fiscal 2025; board-level ESG committee oversees compliance.

Taxation Policy Impact

Effective tax rate is standard for Indian NBFCs; standalone PAT of INR 4,391 Cr is reported after tax provisions.

Legal Contingencies

Not specifically detailed in the documents, though the company maintains an investor grievance redressal mechanism and extensive disclosures.

⚠️ Risk Analysis

Key Uncertainties

Asset quality in non-gold segments is a major uncertainty; Belstar Microfinance incurred a loss of INR 160 Cr in H1 FY26 due to an adverse microfinance environment. Potential impact is a drag on consolidated ROA.

Geographic Concentration Risk

58% of branches are in South India, creating vulnerability to regional economic or political disruptions.

Third Party Dependencies

Dependency on banking channels for 30-40% of funding and on the IRDA for insurance brokerage revenue (INR 70 Cr in H1).

Technology Obsolescence Risk

Risk of digital-only gold loan competitors; Muthoot is mitigating this by grooming 'human capital' (31,113 staff) and improving data collection systems.

Credit & Counterparty Risk

Stage 3 assets in Muthoot Homefin stood at 1.69% as of Sep 2025. Belstar Stage 3 loans were reported at INR 4.58 Cr, though industry-wide microfinance stress remains a monitorable risk.