Muthoot Finance shares hit 52-week low amid asset quality stress
The company's shares fell to ₹2,305 on the National Stock Exchange as rising loan delinquencies impacted the September quarter results.
Muthoot Finance shares slid to a new 52-week low of ₹2,305 on the National Stock Exchange on Monday, according to Mint. The decline comes as investors digest asset quality deterioration in the September quarter (Q2FY27) alongside rising loan delinquencies.
The company's mainstay gold loan assets under management (AUM) increased by 43 per cent year-on-year. While net interest margin (NIM) rose 152 basis points sequentially to 11.93%, credit costs increased significantly.
Risky stage-III assets rose to ₹7,268 crore in Q2 from ₹3,926.5 crore in Q1. Stage-II assets surged to ₹23,466 crore from ₹1,876 crore in Q1 and ₹1,062 crore in Q4FY26.
The shift occurred after Muthoot introduced structured monthly interest-servicing gold loan schemes following revised Reserve Bank of India (RBI) regulations effective 1 April. This replaced earlier bullet repayment loans, leading to missed payments and movement into stage-II and stage-III buckets.
Management expects asset quality stress to ease as customers adjust to the new repayment cycle, stating the spike does not indicate underlying borrower stress. However, Motilal Oswal Financial Services noted that new RBI regulations create a trade-off between growth and yields.
Muthoot has raised its FY27 gold loan AUM growth guidance to 25 per cent from an earlier 15 per cent. H1FY27 gold loan AUM is currently up 16 per cent.