MFMuthoot Finance533398Gold loan financing

Analyst flagged asset quality concerns for Muthoot Finance after a sharp stock correction, citing drought impact in southern India and rising loan stress

By ScoutQuest · Mon 2 Nov 2026, 8:49 AM IST · 1 min read

Stock correction from top

40 percent

Heard on business television between 08:52:05 - 08:55:05 IST.

• Dharmesh Kant noted Muthoot Finance stock corrected nearly 40% from its top, now trading at single-digit PE.
• He said drought in Telangana, AP and Karnataka hit marginal borrowers who take gold loans, causing bounces/defaults on ground level checks.
• He expects asset quality concerns to flare up this quarter due to cascading effects once borrowers default, affecting Muthoot and Manappuram alike.
• Falling gold prices add pressure on LTVs despite providing some hedge via depreciation; next two quarters seen challenging for gold financiers.
• Anchor noted Bajaj Finance also reported rise in stage one/two assets in gold loans, linked to RBI regulation requiring LTV maintenance through loan tenure, changing customer payment behavior from bullet to regular payments.

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