Muthoot Finance Shines Bright with Record Q3 FY2026 Performance

Muthoot Finance Limited, a prominent non-banking financial company (NBFC) in India, delivered a robust performance for the nine months ending December 31, 2025 (Q3 FY2026), showcasing significant growth across its key financial metrics. The company reinforced its position as a leader in gold financing, achieving record-breaking consolidated loan assets under management (AUM) and profit after tax (PAT). This period highlights Muthoot Finance's strategic execution and operational efficiency, translating into substantial value creation for its stakeholders.

For the nine months ended December 31, 2025, Muthoot Finance reported a consolidated loan AUM of ₹1,64,720 Crores, marking an impressive 48% year-on-year (YoY) increase. This milestone underscores the company's expanding market presence and strong customer trust. The consolidated total income for the same period surged by 50% YoY to ₹220,568 million, reflecting broad-based growth across its diverse business segments. Profit before tax (PBT) witnessed an 82% YoY jump to ₹97,207 million, while the consolidated PAT soared by 84% YoY to ₹72,094 million. This exceptional profitability translated into basic earnings per share (EPS) of ₹180.36, an 88% increase over the previous year, demonstrating the company's enhanced earning power. On a standalone basis, the company's loan AUM grew by 51% YoY to ₹1,47,552 Crores, with standalone PAT increasing by a remarkable 91% YoY to ₹7,048 Crores. The core gold loan portfolio, a cornerstone of its business, also achieved a 50% YoY growth, reaching an AUM of ₹1,39,658 Crores. These figures collectively paint a picture of a company firing on all cylinders, leveraging its deep market penetration and customer-centric approach.

Driving Growth Through Core and Diversified Businesses

Muthoot Finance's success in Q3 FY2026 is not solely attributed to its standalone gold loan business but also to the strategic contributions of its diversified subsidiaries. The group's "diversified business of the Group" strategy continues to yield positive results, with each segment playing a crucial role in overall growth and market expansion. The core gold loan business, operated by Muthoot Finance Limited, remains the primary engine, accounting for 88% of the consolidated loan AUM. The company's extensive network of 7,541 branches across 29 states and union territories, coupled with its focus on rural and semi-urban markets, allows it to tap into a significant portion of India's gold stock. The average gold loan AUM per branch reached ₹28.10 Crores, indicating enhanced productivity and efficiency across its vast branch network. Furthermore, new customer acquisition for gold loans saw a 32% YoY increase in disbursements, totaling ₹20,737 Crores to 13,13,710 customers, highlighting the continued demand for its flagship product. The value of gold content in jewellery held as security in the company's lockers stood at an impressive 205 tonnes, valued at ₹2,501 billion, underscoring the robust asset backing of its loan portfolio.

The subsidiaries demonstrated varied but important contributions. Muthoot Homefin (India) Limited, focusing on affordable housing finance, reported a loan AUM of ₹33,802 million, a 24% YoY increase. While its 9M FY26 PAT of ₹193 million was lower than the previous year, the company continues to expand its customer base, reaching 33,871 customers. Its strong Capital Adequacy Ratio of 29.89% and a Debt Equity Ratio of 3.18 indicate a healthy financial structure. Muthoot Money Limited, which has pivoted to gold loans, showed exceptional growth, with its loan AUM soaring by 168% YoY to ₹80,033 million and a significant turnaround in profitability, posting a PAT of ₹2,034 million compared to a loss in the prior year.

Asia Asset Finance PLC, the listed diversified NBFC in Sri Lanka, also contributed positively, with its loan AUM growing by 49% YoY to LKR 42,240 million and PAT increasing by 36% YoY to LKR 680 million. The expansion of its branch network by 11% YoY to 111 branches further solidifies its regional presence. Muthoot Insurance Brokers Private Limited, however, saw a decline in premium collection and PAT for the nine-month period, indicating some headwinds in the insurance broking segment. Belstar Microfinance Limited, despite a 9% decline in loan AUM to ₹79,106 million, faced challenges, reporting a loss of ₹1,086 million for the period. The group's overall strategy, however, remains focused on leveraging the strengths of its core business while nurturing its diversified ventures for long-term sustainable growth.

Digital Transformation and Robust Financial Health

Muthoot Finance is actively embracing digital transformation to enhance customer experience, improve operational efficiency, and drive inclusive growth. The company's digital initiatives span direct credit facilities, point-of-sale (PoS) terminals, and a comprehensive suite of loan repayment options. The iMuthoot Mobile App stands out as a key enabler, boasting 22.8 million downloads and 5.5 million registered users, reflecting an 85% YoY growth. This app facilitates online gold loan (OGL) withdrawals, renewals, and payments, with 41% of gold loan interest repayments and 65% of gold loan top-ups in Q3 FY26 occurring through the platform. The significant 279% YoY growth in interest repayments via the app underscores the increasing digital adoption among its customer base. These digital channels not only contribute over 99% of unsecured cross-sell lending business but also lead to better controls, improved turnaround times, and enhanced efficiency. Features like WhatsApp channel for loan offers and the "Money on Call" service for top-ups further exemplify the company's commitment to digital convenience.

The company's financial health remains robust, characterized by a highly liquid portfolio and stable funding sources. The margin of safety on its gold loans stood at a healthy 44% as of December 2025, providing a strong buffer against market fluctuations. Muthoot Finance maintains a diversified funding profile, with borrowings from banks and financial institutions constituting 50% of its funding, followed by secured non-convertible debentures at 29%, and external commercial borrowings at 15%. This mix ensures stable and cost-effective access to capital. The company's capital adequacy ratio (CAR) of 20.27% as of December 2025 is well above the statutory requirement of 15%, indicating ample headroom for future leveraging and growth. This strong capital base, coupled with consistent returns on average equity (ROE of 32.03% for Q3 FY26), reinforces investor confidence. The company's commitment to maintaining high credit ratings from agencies like CRISIL, ICRA, Fitch, S&P Global, and Moody's Investors Service further attests to its financial prudence and stability.

Strategic Outlook and Investor Confidence

Muthoot Finance's Q3 FY2026 performance underscores a period of strategic clarity and disciplined execution. The company has successfully navigated a dynamic market landscape by focusing on its core strengths, expanding its digital footprint, and prudently managing its diversified portfolio. The significant growth in consolidated loan AUM and PAT, coupled with strong asset quality metrics, reflects the effectiveness of its multi-pronged approach. The company's status as an "Upper Layer NBFC" and India's "#1 Most Trusted Financial Services Brand 2025" further solidifies its market leadership and brand equity.

Looking ahead, Muthoot Finance is well-positioned for sustained growth. Its deep penetration in rural and semi-urban India, where a large portion of the country's gold stock resides, provides a significant competitive advantage. The continued emphasis on digital initiatives will not only enhance customer convenience but also drive operational efficiencies and expand reach. The turnaround in profitability for subsidiaries like Muthoot Money Limited demonstrates the group's ability to adapt and optimize its business models. While some segments like Belstar Microfinance and Muthoot Insurance Brokers faced challenges, the overall group performance remains strong, driven by the robust core business. The company's stable funding profile, high capital adequacy, and focus on asset quality provide a solid foundation for future expansion. Muthoot Finance remains committed to delivering consistent returns to its stakeholders, leveraging its trusted brand, extensive network, and innovative service offerings to capitalize on emerging opportunities in the financial services sector. Investors can look forward to continued growth and value creation from this resilient and strategically agile financial institution.