Muthoot Finance Q2 results: Profit rises 27% to Rs 2,977 crore, gold loan assets grow 42%

Profit before tax increased 27% to Rs 3,993 crore in Q2 FY27, against Rs 3,151 crore a year earlier.

The company announced its unaudited financial results for the quarter and half year ended September 30, 2026, on October 31.

Muthoot Finance’s standalone loan assets under management (AUM) rose 42% year on year to Rs 1,87,810 crore at the end of September, compared with Rs 1,32,305 crore a year earlier.

At the consolidated level, loan AUM also increased 42% to Rs 2,09,317 crore. Consolidated PAT for Q2 FY27 rose 36% to Rs 3,278 crore from Rs 2,412 crore in the year-ago quarter. It was up 16% from Rs 2,825 crore in Q1 FY27.

For the first half of FY27, consolidated PAT increased 39% to Rs 6,103 crore, compared with Rs 4,386 crore in the corresponding period last year.

How did Muthoot Finance’s gold loan business perform?

Gold loans remained the key driver of Muthoot Finance’s growth. Standalone gold loan AUM increased 43% year on year to Rs 1,78,956 crore in the first half of FY27, while consolidated gold loan AUM rose 46% to Rs 1,93,212 crore.

The company said its consolidated loan AUM increased by Rs 61,644 crore over the year. Standalone loan AUM grew by Rs 55,505 crore.

Some of the key operating indicators for the first half of FY27 were:

New customers: The company disbursed Rs 20,238 crore in gold loans to 9,93,900 new customers.

Active customer base: The number of active customers increased from 64 lakh to 69 lakh.

Gold held as security: The quantity of gold kept in the company’s lockers rose from 196 tonnes to 204 tonnes.

Gold loan AUM per branch: Average gold loan outstanding per branch stood at Rs 34.22 crore, up 36% from Rs 25.15 crore in the year-ago period.

Muthoot Finance also expanded its branch network. It added 201 branches during the September quarter, taking its standalone branch count to 5,230 at the end of September. The group’s total branch network stood at 7,904, compared with 7,524 a year earlier.

Commenting on the results, Alexander George Muthoot, managing director of Muthoot Finance, said the company had delivered another strong quarter. He said standalone loan AUM had reached Rs 1,87,810 crore, registering 42% year-on-year and 9% quarter-on-quarter growth.

He added that the company would raise its gold loan growth guidance for FY27 by an additional 10%.

“The RBI’s updated gold lending guidelines, effective 1st April 2026, involves a learning curve for us as well as customers, which will get stabilized over a few quarters irrespective of which growth trajectory will continue,” Alexander George Muthoot said.

The revised Reserve Bank of India (RBI) gold lending guidelines came into effect on April 1, 2026. The company said lenders and customers would need time to adjust to the new framework.

George Alexander Muthoot, executive vice-chairman of the company, attributed the group’s performance to growth in its core gold loan business. He said consolidated loan AUM had reached a record Rs 2,09,317 crore in Q2 FY27, up 42% from a year earlier.

“Our consolidated Profit after Tax grew by 39 % YoY to Rs. 6,103 crores underpinned by healthy growth in our core gold loan business,” he said.

He also said subsidiaries accounted for 12% of the group’s consolidated loan assets. The company expects its expanded branch network and gold loan operations to support growth through FY27.

How did Muthoot Finance’s subsidiaries perform?

The group’s subsidiaries reported mixed but largely improved performance during the first half of FY27. Muthoot Money recorded strong growth in loan assets and profit, while Belstar Microfinance returned to profit after reporting a loss in the year-ago period.

Muthoot Money: Its loan AUM nearly doubled, rising 99% year on year to Rs 12,716 crore in H1 FY27 from Rs 6,393 crore in H1 FY26. Total revenue increased 120% to Rs 1,103 crore from Rs 500 crore, while PAT jumped 242% to Rs 364 crore from Rs 106 crore.

Belstar Micro-finance: The subsidiary reported a PAT of Rs 144 crore in the first half, compared with a loss of Rs 160 crore in the same period last year. Its loan AUM stood at Rs 7,876 crore, against Rs 7,715 crore a year earlier. Revenue increased 8% to Rs 906 crore.

Belstar also reported an improvement in asset quality:

Gross non-performing assets (GNPA) declined to 3.26% from 4.58% a year earlier.

Net non-performing assets (NNPA) fell to 0.07% from 0.26%.

Collection efficiency improved to 99.61% from 99.25%.

The subsidiary expanded its gold loan operations by opening 82 branches during the first half, taking the total to 163. Its gold loan portfolio reached Rs 484 crore by the end of September.

Muthoot Homefin: The group’s housing finance subsidiary reported a loan AUM of Rs 3,460 crore in H1 FY27, up 7% from Rs 3,247 crore in the year-ago period. Total revenue rose 2% to Rs 218 crore, while PAT increased 9% to Rs 11 crore.

Asia Asset Finance: Muthoot Finance’s listed subsidiary in Sri Lanka reported a 39% increase in loan AUM to LKR 5,394 crore. Revenue rose 63% to LKR 719 crore, while PAT increased 110% to LKR 84 crore.

The group added 336 branches during H1 FY27. Muthoot Finance accounted for 262 of these additions, while Muthoot Money opened 13 branches. The company also said Asia Asset Finance completed a rights issue in September 2026, raising LKR 1.5 billion.

What are Muthoot Finance’s merger plans and other financial indicators?

Alongside its results, Muthoot Finance announced a proposed merger of its wholly owned subsidiary, Muthoot Money Limited, with Muthoot Finance Limited.

The board approved the merger during the quarter, with April 1, 2027, set as the appointed date. The transaction remains subject to regulatory and other approvals.

Muthoot Finance said the consolidation would simplify the group’s structure and improve operational and financial efficiency. Muthoot Money currently operates in the gold loan business.

The company also reported an increase in credit losses and a decline in its capital adequacy ratio.

Credit losses: Standalone credit losses increased to Rs 188 crore in H1 FY27 from Rs 99 crore in H1 FY26.

Credit losses as a share of gross loan AUM: The ratio rose to 0.10% from 0.06%.

Capital adequacy: The ratio stood at 19.81% at the end of Q2 FY27, compared with 20.30% in the previous quarter and 20.89% a year earlier.

Muthoot Finance’s Q2 performance was supported by growth in its gold loan portfolio, customer base and branch network. The company has also raised its FY27 gold loan growth guidance and plans to consolidate Muthoot Money, subject to approvals.

Going forward, the performance of its subsidiaries, movement in credit costs and the implementation of the RBI’s revised gold lending guidelines will remain important factors for the company’s growth.