1. At a Glance
India’s largest gold loan NBFC with ₹1.22 lakh crore AUM, Muthoot Finance is not just sitting on a mountain of gold — it’s monetizing it better than most banks. With 4,800+ branches, 202 tonnes of gold jewelry, and 20% profit growth in FY25, this is financial alchemy at scale.
2. Introduction with Hook
Imagine Fort Knox gave out loans at 24% interest and got repaid in full. That’s basically Muthoot Finance — the banker you run to when your cousin’s wedding costs more than your income.
- FY25 Net Profit: ₹5,352 Cr
- Gold held as collateral: 202 tonnes
- Branches: 4,800+
- ROE: 20%
In short, Muthoot is a one-stop pawnshop… that also happens to be a ₹1 lakh crore powerhouse with investment-grade global ratings.
3. Business Model (WTF Do They Even Do?)
Muthoot’s core weapon: Gold Loans.
Borrowers hand over gold jewelry as collateral, Muthoot disburses cash — quick, no-fuss, and fully secured.
Main Verticals:
- Gold Loans – 90%+ of revenue
- Loan Against Property
- Business & Personal Loans
- Money Transfer & Insurance Distribution
- Muthoot Money (Vehicle Finance)
- International Ops – via Muthoot Global FZE, UAE
Revenue Model:
- Interest income on gold loans
- Zero credit risk (thanks to collateral)
- Fees on allied services
4. Financials Overview
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 11,898 | 15,062 | 20,214 |
| Interest Exp (₹ Cr) | 4,225 | 5,452 | 7,412 |
| Net Profit (₹ Cr) | 3,670 | 4,468 | 5,352 |
| EPS (₹) | 89.98 | 107.71 | 132.84 |
| Net Interest Margin | 41% | 40% | 36% |
| Dividend Payout | 24% | 22% | 20% |
Muthoot prints money like a gold-plated Xerox machine.
5. Valuation
Let’s crunch it like a roasted cashew:
- CMP: ₹2,650
- EPS FY25: ₹132.84
- P/E: 20x
- BV: ₹731 → P/B = 3.62x
- ROE: 20%
Fair Value Range: ₹2,850 – ₹3,400
(based on 21x–25x FY26E EPS of ₹136–₹145)
Cheap? Not really. Just consistently profitable.
6. What’s Cooking – News, Triggers, Drama
- Loan Book crosses ₹1.22 Lakh Cr: New milestone.
- Moody’s + S&P Credit Rating Upgrade: Confidence boost.
- Interim Dividend ₹26/share: Cash in hand.
- Fraud Alert: ₹11.92 Cr internal fraud by ex-employee — investigated & contained.
- US$250M Bond Issuance: Global fundraising in motion.
- Q1FY26 Results Soon: Expected to continue the 20% YoY growth trend.
This vault is busy — and not just with gold.
7. Balance Sheet
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹401 Cr | ₹401 Cr | ₹401 Cr |
| Reserves | ₹21,264 Cr | ₹24,706 Cr | ₹28,965 Cr |
| Borrowings | ₹55,804 Cr | ₹68,274 Cr | ₹99,383 Cr |
| Net Worth | ₹21,665 Cr | ₹25,107 Cr | ₹29,366 Cr |
| Total Assets | ₹80,134 Cr | ₹96,453 Cr | ₹1,32,860 Cr |
A growing mountain of assets, backed by real gold. Literal hard collateral.
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash |
|---|---|---|---|---|
| FY23 | -₹2,804 | ₹180 | ₹395 | -₹2,229 |
| FY24 | -₹13,754 | ₹48 | ₹11,958 | -₹1,749 |
| FY25 | -₹26,376 | -₹1,376 | ₹29,893 | ₹2,140 |
Negative cash flow from ops = loan book expansion. They’re not bleeding; they’re growing.
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE (%) | 18% | 18% | 20% |
| ROA (%) | 4.7% | 4.7% | 5.2% |
| Cost to Income | ~36% | ~36% | ~34% |
| Net NPA | <1% | <1% | <1% |
| Debt/Equity | 2.6x | 2.7x | 3.4x |
Despite debt-heavy structure, the NPAs are practically invisible. It’s the gold-backed magic.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | Net Profit | EPS | NIM (%) | Dividend Payout |
|---|---|---|---|---|---|
| FY23 | ₹11,898 Cr | ₹3,670 Cr | ₹89.98 | 41% | 24% |
| FY24 | ₹15,062 Cr | ₹4,468 Cr | ₹107.71 | 40% | 22% |
| FY25 | ₹20,214 Cr | ₹5,352 Cr | ₹132.84 | 36% | 20% |
Margins compressing slightly, but scale is compensating handsomely.
11. Peer Comparison
| Company | ROE (%) | P/E | AUM (₹ Cr) | PAT (₹ Cr) | NIM (%) | GNPA (%) |
|---|---|---|---|---|---|---|
| Bajaj Finance | 19.2 | 34.3 | ₹2.3L Cr | ₹16,664 | ~10% | ~1.0% |
| Shriram Finance | 15.6 | 15.3 | ₹1.85L Cr | ₹8,208 | ~8.5% | ~3.0% |
| Cholamandalam | 19.7 | 30.7 | ₹1.36L Cr | ₹4,263 | ~9.5% | ~2.0% |
| Muthoot Finance | 19.6 | 20.0 | ₹1.22L Cr | ₹5,352 | 36% | <1% |
Lowest GNPA, highest NIM, and cheapest P/E after Shriram. A silent overachiever.
12. Miscellaneous – Shareholding, Promoters
- Promoters: 73.35% — stable and strong
- FIIs: 11.02% (rising steadily)
- DIIs: 11.75% (marginal dip)
- Public: 3.87%
- Total Shareholders: 3.05 lakh (as of Mar 2025)
Governance incident in FY25 (₹11.9 Cr fraud) was swiftly managed. Didn’t dent confidence.
13. EduInvesting Verdict™
Muthoot Finance is like your no-frills, high-trust neighborhood banker… if that banker handled ₹1.22 lakh crore and got rated by Moody’s.
With gold prices stable, demand for fast collateral loans high, and branch presence unmatched, Muthoot is the kind of legacy player you ignore at your own peril.
Steady ROE, high margins, and clean books make this the gold standard of NBFCs — quite literally.
Metadata
– Written by EduInvesting Research Team | 17 July 2025
– Tags: Muthoot Finance, Gold Loans, NBFC, AUM Growth, Moody’s Upgrade, Financial Compounder, India Lending Stock, High ROE
