Muthoot Finance Shares At New 52 Wk High; Stock Rally 98% in 12 Months; Motilal Oswal Expects More Upside

Muthoot Finance shares continued their rally for the third consecutive trading session on November 17, after the strong Q2 FY26 earnings. The multibagger NBFC stock and India's largest gold loan provider has been in a sustained uptrend for months. The stock has nearly doubled in a year and is one of the top wealth creators in the NBFC sector.

Muthoot Finance Share Price Today

As of 12:20 pm on November 17, Muthoot Finance shares traded at Rs. 3,745.20, up 0.53% intraday. After the announcement of healthy Q2 results, the counter saw huge interest and rose by 11.385 in the last five days. Muthoot Finance stocks rose 79.62% in six months and have rewarded investors with almost double returns by rising 98.62% in one year.

Why Are Muthoot Finance Shares Rising?

1. Blockbuster Q2 FY26 Earnings: The major trigger behind the rally is Muthoot Finance's exceptional Q2 FY26 performance, with the company reporting a PAT growth of 87% YoY and 15% QoQ to Rs 23.5 billion. The NBFC firm saw strong gold loan growth of around 45% YoY to Rs 1.25 trillion. By the end of the quarter, Muthoot Finance's total loan book, or the Consolidated Loan AUM, had grown 42% from last year to Rs. 1.47 lakh crore, the highest the company has ever achieved. Its Gold Loan AUM also increased by 45% to Rs. 1.24 lakh crore, again the highest on record. During this period, the company disbursed gold loans worth Rs. 13,183 crore.

2. Favourable RBI Norms, Higher Gold Prices: MOFSL in its report said that the stock is benefiting from RBI's tighter norms on unsecured credit, which have diverted demand back to safer gold-backed loans. Additionally, the surging gold prices expand LTV buffers and loan ticket sizes. With gold prices hitting multi-year highs globally, gold loan companies like Muthoot Finance are seeing accelerated growth.

3. Profitability & Return Ratios: In Q2 FY26, Muthoot Finance reported an RoA of 7.2% and an RoE of 30%, which are among the highest in the Indian NBFC sector.

Should You Buy Muthoot Finance Shares Today?

Motilal Oswal Financial Services, in a report dated November 14, maintained a Neutral rating but revised its target price (TP) to Rs 3,800, indicating further upside potential from current levels.

The brokerage in its report noted, "Muthoot Finance trades at 3.1x FY27E P/BV and 14x P/E and has benefited from the sharp rise in gold prices and improvement in gold loan demand due to rationing in unsecured credit. Muthoot is one of the best franchises for gold loans in the country, evident from its industry-leading growth and profitability. Muthoot Finance is well-positioned for continued growth into H2 FY26 and FY27. Analysts expect around 48% YoY PAT growth in H2 FY26, supported by higher yields and strong borrower sentiment."

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