Muthoot Finance's shares surged 6.8% in Monday's (November 18) trading session, reaching an intraday high of Rs 1,899 per share on BSE. The company's strong Q2FY25 earnings have fueled purchasing interest in the stock.

Muthoot Finance shares rose 4.37 percent to Rs 1855.3 per share on the BSE at 9:28 a.m. In comparison, the BSE Sensex was down 0.20 percent to 77,453.86. The company's market value stands at Rs 74,810.79 crore. The stock's 52-week high was Rs 2,077.45 per share on the BSE, while its 52-week low was Rs 1,262.25 per share. In the September quarter, the company recorded a 21 percent year-on-year (Y-o-Y) increase in consolidated net profit to Rs 1,321 crore, up from Rs 1,095 crore in Q2 FY24.

The overall revenue from operations stood at Rs 4,928.82 crore, up from Rs 3,606.13 crore the previous year, representing a 36.6 percent rise. Impairment on financial instruments increased dramatically to Rs 420 crore in Q2 FY25 from Rs 81.14 crore in Q2 FY24.

In September 2024, the company's aggregated loan assets under management (AUM) increased 31 percent year on year to Rs 1.04 trillion, up from Rs 79,493 crore the previous year. Of this, the gold loan portfolio increased by 28 percent year on year to Rs 86,164 crore. The company's board has approved an additional Rs 500 crore equity entry into Muthoot Money.

The infusion is intended to increase the capital base and raise the capital adequacy ratio. Motilal Oswal has assigned a 'Neutral' rating to Muthoot Finance stock, with a reduced target price of Rs 1,815/share.

The firm feels the positives have already been built into its values of 2.2x FY26E P/BV, and it predicts limited upside catalysts for the company. Muthoot Money Limited is a wholly owned subsidiary, hence additional stock injection does not result in a change in shareholding.

Muthoot Finance is a non-banking financial firm (NBFC) best known for its gold loan business. Founded in 1887, the organization offers a variety of financial services, such as gold loans, personal loans, insurance, and money transfers. Muthoot Finance's principal product is gold loans, in which individuals can pledge gold jewellery to get rapid, short-term loans. The organization operates over 5,000 branches across India, serving to both urban and rural populations. Aside from gold loans, it also provides microfinance, which allows impoverished areas to access financial resources. 

 Muthoot Finance shares have increased by 33% over the last year, compared to an 18% increase in the Sensex.