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We do not publish one number for Muthoot Finance — and here is why.
On today's figures our model puts Muthoot Finance at roughly 2.6 times what the market pays for it. On a company this widely followed, a gap that large almost always means our model is missing something rather than that thousands of investors are wrong. So we show the workings and say plainly that we cannot stand behind a single figure here.
- How it is valued: no single figure is published here — our model and the market disagree too far.
- What the price assumes: 19.0% return on equity, against 27.0% the model takes from its own record.
- Ten-year record: Between FY2019 and FY2026, Muthoot Finance's revenue went from ₹7,594 crore to ₹31,209 crore — it compounded at about 22% a year over 7 years.
- Biggest swing factor: Gold prices. Main risk: A gold price fall.
01Loans against gold, in thousands of branches
Muthoot Finance, based in Kochi and run by the Muthoot family, is India's largest gold-loan company. Customers pledge gold jewellery and receive a loan within minutes at one of its thousands of branches, many in southern India.
Because loans are secured by gold worth more than the loan, losses are low. It also has subsidiaries in microfinance (Belstar Microfinance), housing finance and Sri Lanka.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the return on equity that price implies for Muthoot Finance, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Muthoot Finance's record, in plain numbers
Between FY2019 and FY2026, Muthoot Finance's revenue went from ₹7,594 crore to ₹31,209 crore — it compounded at about 22% a year over 7 years. Net profit grew from ₹2,103 crore to ₹10,607 crore, about 26% a year — faster than revenue, so margins widened. In FY2026 it kept 34.0% of revenue as net profit — its best year in the period. The latest year added 54.4% to revenue, well ahead of its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2019 | 7,594 | 2,103 | 27.7% |
| FY2020 | 9,684 | 3,169 | 32.7% |
| FY2021 | 11,531 | 3,819 | 33.1% |
| FY2022 | 12,185 | 4,031 | 33.1% |
| FY2023 | 11,898 | 3,670 | 30.8% |
| FY2024 | 15,062 | 4,468 | 29.7% |
| FY2025 | 20,214 | 5,352 | 26.5% |
| FY2026 | 31,209 | 10,607 | 34.0% |
04How Muthoot Finance gets valued — and why
Estimate withheld — model and market disagree too farOur model and the market disagree so far apart on this company that the model is the more likely one to be wrong. Rather than publish a number we cannot stand behind, we show the workings and say so.
05What decides Muthoot Finance's value
Gold prices
Higher prices raise loan sizes and collateral cover.
Loan growth
Branch expansion and new customers grow the book.
Yields
Gold loans earn high interest rates.
Competition
Banks are pushing harder into gold loans.
06What could go wrong
- A gold price fall. Lower prices shrink loans and raise auction risk.
- Regulation. RBI rules on gold-loan practices can tighten.
- Competition. Banks and fintechs target the same borrowers.
07What the full Muthoot Finance valuation shows
Sign in free to see the complete Muthoot Finance valuation
- ✓Fair value per share — from the excess-return model used for lenders
- ✓The lender workpaper — book value, cost of equity and sustainable return, step by step
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against other gold-loan and consumer lenders
- ✓Downloadable report — the full write-up, yours to keep
08Questions people ask about Muthoot Finance
How do gold prices affect Muthoot Finance?
Higher prices let customers borrow more against the same gold, growing the loan book.
Why are gold loans low-risk?
They are backed by gold worth more than the loan, which can be auctioned if unpaid.
Is Muthoot Finance a bank?
No, it is a non-banking financial company that funds itself in the market.
Is Muthoot Finance overvalued?
At ₹2,840 the market is pricing in roughly 19.0% sustained ROE, against the ~27.0% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of Muthoot Finance?
This business is a group of operations with different economics, so a single blended figure would describe none of them. The parts are valued separately and the breakdown is in the report, rather than one number that cannot be defended.
How much debt does Muthoot Finance carry?
Debt to equity stands at 2.93, against 2.63 at the start of the period — the balance sheet is a core input to the cost of capital used here.