Muthoot Finance Shines Bright: Q2 FY26 Earnings Report

Muthoot Finance Limited, India's leading gold financing company, has delivered a stellar performance in the second quarter and first half of Fiscal Year 2026. The company's unaudited standalone and consolidated results for the period ending September 30, 2025, showcase robust growth across key financial metrics, reinforcing its dominant position in the market and strategic agility.

The consolidated loan assets under management (AUM) reached an all-time high of 147,673 crore, marking an impressive 42% year-on-year (YoY) increase. This substantial growth was mirrored in the consolidated profit after tax, which surged by 74% YoY to 4,386 crore for the first half of FY26. On a standalone basis, Muthoot Finance reported a profit after tax of 4,391 crore for H1 FY26, an 88% increase YoY, with standalone loan AUM growing 47% YoY to 132,305 crore. The core gold loan AUM alone expanded by 45% YoY to 124,918 crore, demonstrating the sustained trust of its vast customer base.

Strategic Growth and Operational Excellence

Muthoot Finance's success is not merely a reflection of market conditions but a testament to its strategic initiatives and operational efficiency. The company's focus on its core gold loan business, coupled with prudent diversification through its subsidiaries, has yielded strong results. The quantity of gold held as security in its lockers increased from 199 tonnes to 209 tonnes YoY, indicating a healthy expansion of its secured lending portfolio. Gold loan disbursements to new customers amounted to 13,183 crore, serving 890,920 new customers, highlighting effective customer acquisition strategies.

Recognizing the evolving financial landscape, Muthoot Finance is accelerating its digital transformation. The iMuthoot mobile app and Online Gold Loan (OGL) facility are key pillars of this strategy. The iMuthoot app contributed significantly to gold loan interest repayments, showing a remarkable 215% YoY growth and accounting for 33% of total repayments. The company also reported 7.8 million digital transactions, underscoring the growing adoption of its digital platforms. These initiatives aim to provide faster, more seamless credit access, enhance customer convenience, and reduce cash handling at branches.

Furthermore, the company's commitment to expanding its reach is evident in its growing branch network. The Group opened 133 new branches in H1 FY26, strengthening its presence across India and in underserved rural and semi-urban markets. This expansion is crucial for catering to a broader demographic and sustaining growth momentum.

Subsidiary Performance and Strategic Pivots

Muthoot Finance's subsidiaries have played a vital role in its diversified growth strategy:

• Muthoot Homefin (India) Limited (MHIL): The affordable housing finance arm saw its loan AUM grow by 33% YoY to 3,247 crore in H1 FY26. Total revenue increased by 44% YoY to 222 crore, and profit after tax stood at 10 crore. MHIL focuses on Economically Weaker Sections (EWS) and Lower Income Groups (LIG) in Tier II & III locations, demonstrating a commitment to financial inclusion.

• Muthoot Money Limited (MML): This wholly-owned subsidiary demonstrated an impressive turnaround. After incurring a 5 crore loss in H1 FY25, MML posted a profit after tax of 106 crore in H1 FY26. Its loan AUM surged by 182% YoY to 6,393 crore, with total revenue increasing by 244% YoY to 501 crore. MML strategically shifted its focus entirely to gold loans, discontinuing vehicle finance due to low margins and high defaults, showcasing adaptive management.

• Belstar Microfinance Limited (BML): While BML incurred a loss of 160 crore in H1 FY26, consistent with the challenging microfinance sector environment, losses narrowed from 128 crore in Q1 to 32 crore in Q2. BML is actively diversifying its loan product portfolio by opening 23 gold loan branches in H1 FY26, leveraging the RBI's allowance for microfinance companies to hold up to 40% non-microfinance loan portfolios. Its branch network expanded to 1,287 branches.

• Muthoot Insurance Brokers Pvt. Limited (MIBPL): The insurance broking arm generated a total premium collection of 241 crore in H1 FY26, with total revenue of 70 crore and a profit after tax of 23 crore.

• Asia Asset Finance PLC (AAF), Sri Lanka: This listed subsidiary saw its loan portfolio grow by 48% YoY to LKR 3,868 crore (approximately 1,134.26 crore INR) in H1 FY26. Total revenue increased by 40% YoY to LKR 440 crore (approximately 129.01 crore INR), and profit after tax rose by 33% YoY to LKR 40 crore (approximately 11.73 crore INR).

Financial Summary Table (Consolidated)

Outlook and Investor Confidence

Management has expressed strong confidence in the company's future trajectory, upgrading its FY26 gold loan growth guidance from 15% to 30-35%. This optimism is fueled by favorable regulatory changes in the RBI for the gold loan sector, higher gold prices, and tighter norms for unsecured credit, all of which are expected to boost gold loan demand. The company's non-gold loan portfolio is expected to maintain its contribution at 12-15% of the consolidated loan board portfolio, with the microfinance sector showing renewed resilience.

An international credit rating upgrade from Fitch Ratings, from 'BB' to 'BB+' with a 'Stable' outlook, further solidifies investor confidence by reaffirming the strength of Muthoot Finance's business model. The company's disciplined capital allocation, transparent disclosures, and proactive risk management continue to position it for sustained growth and value creation for its stakeholders.

Muthoot Finance's Q2 FY26 results underscore a period of strategic clarity, robust growth, and disciplined execution, setting a strong foundation for continued success in the evolving financial services landscape.