Muthoot Finance Limited

Financial Services — Credit Services · NSE

₹2,598.30−₹1.70 (−0.07%)

DalalBaazaar Score

86 / 100

🟢 Strong

Verdict

ATTRACTIVE

Risk

Low

Driven by negative free cash flow.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Muthoot Finance Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Muthoot Finance Limited, a non-banking financing company, provides gold loans in India.

IndustryCredit Services

SectorFinancial Services

Employees31,617

Annual revenue₹20,265 Cr

How does it make money?

Turns over ₹20,265 Cr a year. Of every ₹100 of sales, about ₹52 reaches shareholders as profit. Each of its 31,617 employees supports ₹64.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹64.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, STATE BANK OF INDIA, HDFC BANK LTD, ICICI BANK LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

Peer median ROE16.5%

What is the outlook?

17 analysts covering the stock expect revenue to grow about 14.3% and earnings to grow about 11.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.3%

Est. earnings growth+11.8%

Analysts17

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +163% while net margin moved +12% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+163%

Margin effect+12%

DalalBaazaar Score

86/ 100

Strong

Weighted across six categories. Every point is explained below.

✓ Beta of 0.52 — historically steadier than the index
✓ Large-cap: deep liquidity and broad analyst coverage
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

89/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

85/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

9.2x

3Y Median

19.9x

40 monthly readings · mean 19.6x · range 9.8x–28.8x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 54% below its 3y median of 19.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 46% below the peer median of 17.0x.

vs. its own history

Cheap

19.9x median over 40 months · -54%

vs. sector peers

Cheap

17.0x median of 4 peers · -46%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

—

PEG

0.21

What's Good / What's Bad

🟢 What's Going Well2

Return on equity is rising
ROE has improved from 16.7% to 27.1%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 54% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 46% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

No clear risk case emerges from the available numbers — which is not the same as there being none.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 29% a year✓ 38.0% CAGR
Latest reported year was 35.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2Return on equity stays above 30%✓ 31.7%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Valuation vs its own median of 19.9x✓ 9.2x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹1.04 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

9.2x

Cheap

Cheap against the generic band

P/B Ratio

2.57x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹283.28

Profitable

Profitable on a per-share basis

ROE

31.7%

Strong

Strong capital efficiency

ROCE

Not meaningful

N/A for lenders

Banks and NBFCs don't report capital employed the way other businesses do

Debt/Equity

3.94x

High

High leverage

Revenue Growth (YoY)

35.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

38.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.15%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹47,545 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

8.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

6.4%

Average

Average asset productivity

Operating Margin

74.6%

Good

Healthy core-business profitability

Net Margin

55.5%

Good

Strong bottom-line conversion

Current Ratio

106.85

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.52

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

2712.7 / 2840.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

24.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7,710 Cr	₹9,656 Cr	₹12,853 Cr	₹20,265 Cr	+38.0%
PAT (Net Profit)	₹3,612 Cr	₹4,324 Cr	₹5,333 Cr	₹10,590 Cr	+43.1%
EPS	₹89.98	₹107.71	₹132.83	₹263.79	+43.1%
ROE	16.7%	17.2%	18.2%	27.1%	—
Total Debt	₹55,506 Cr	₹67,742 Cr	₹98,815 Cr	₹1.51 L Cr	+39.6%
Free Cash Flow	-₹2,945 Cr	-₹13,828 Cr	-₹26,742 Cr	-₹47,545 Cr	—

🟢 Revenue has grown at 38.0% a year over 3 years.

🟢 PAT (Net Profit) has grown at 43.1% a year over 3 years.

🟢 EPS has grown at 43.1% a year over 3 years.

🟢 ROE has risen from 16.7% to 27.1% over 3 years (+10.4 pts).

🔴 Total Debt has grown at 39.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1.96 L Cr

Total Liabilities

₹1.56 L Cr

Cash & Equivalents

₹13,021 Cr

Operating Cash Flow

-₹47,393 Cr

Capex

-₹153 Cr

Shareholding (proxy)

Institutional Holding

16.9%

Insider Holding

73.4%

Corporate Actions

Next Earnings

30 Oct 2026

Dividend Rate

₹30

Ex-Dividend Date

17 Apr 2026

Analyst Consensus

Recommendations

11 Buy · 5 Hold · 6 Sell

Target Price (Mean)

₹3,280.77

+26.3% vs CMP

Target Range

₹2,326 – ₹4,500

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
STATE BANK OF INDIA	10.3x	15.2%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%

Recent News

1 positive2 mixed1 negative2 general

Muthoot Finance: Mkt Cap Up 25 Times In 15 Years

https://www.fintechbiznews.com/, 17 Oct

Muthoot Finance Share Price Falls Nearly 9% After Q1 Results, Brokerage Downgrades Weigh on Sentiment

India Infoline, 03 AugAnalyst view

🔴Potentially negativeAn analyst opinion changing, which moves the price without changing the business.

Gold Duty Hike Triggers Rally In Gold Loan Stocks: Manappuram Finance & Muthoot Finance Shares Surge 8%

Goodreturns, 14 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Gold Stocks 2026: Muthoot Finance, Manappuram Finance

Univest, 15 Oct

Muthoot Finance declares 300% dividend on record FY26 profits

scanx.trade, 31 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Muthoot Finance To Merge Gold Loan Subsidiary With Itself. Morgan Stanley Stays 'Overweight'; Check Target Price

NDTV Profit, 01 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

All 3 tripwires holding · see Key things to watch ↑