Gold loan NBFC Muthoot Finance continued its upward trajectory, hitting a record high of ₹3,374 apiece in Friday’s intraday session, October 17, gaining 3.25% in tandem with the rally in gold prices. Today’s rally also marked the fourth consecutive day of gains for the stock, resulting in a cumulative rise of 5%.
The surge in gold prices has boosted investor sentiment for the company, as higher collateral values and rising loan demand strengthen its business outlook. The stock has been on a sustained bull run since May 2025, surging 58% so far this year. If yearly returns cross 60%, it would mark the company’s biggest annual gain since 2017.
Demand for gold loans has remained robust in recent quarters, with analysts expecting further growth. Limited access to unsecured loans, along with rising gold prices, is likely to keep demand steady.
Meanwhile, other factors such as target price upgrades from brokerages and recent lending guidelines by the Reserve Bank of India have also supported the stock’s stellar performance.
Earlier this month, global brokerage CLSA raised its target price for Muthoot Finance to ₹3,600 while maintaining a ‘buy’ rating. CLSA noted that a combination of higher gold prices, gradual increases in loan-to-value (LTV) ratios, and consistent loan volumes prompted it to significantly raise its projected AUM growth.
The brokerage now expects Muthoot Finance to achieve a 23% compound annual growth rate (CAGR) in AUM and a 37% CAGR in profit after tax (PAT) for FY2025–2027, while revising its PAT forecasts upward by 10–15%.
Meanwhile, rating agency ICRA, in its latest report, estimates that the organised gold loan (GL) market will reach the ₹15 trillion mark in the current financial year — a year earlier than previously anticipated.
The steady uptrend in gold prices, reaching new highs, is cited as the key driver behind this faster-than-expected growth. ICRA now projects the GL market size to rise to ₹18 trillion by FY2027.
Gold prices breach the $4,300 level in the international market
Continuing their unwavering rally, gold prices reached a new milestone by crossing the $4,300-per-ounce mark (spot) in the international market to $4,379, edging closer to the $4,400 level.
This sustained rally has led analysts to repeatedly revise their target levels upward, as prices continue to exceed projections earlier than expected. So far in 2025, gold prices have zoomed 65%.
A combination of factors — including continued central bank demand, growing expectations of another rate cut by the US Federal Reserve, escalating trade tensions between China and the US, and the ongoing US government shutdown — has propelled the yellow metal to one of its best yearly gains in recent history.
Earlier, the US Federal Reserve noted that the labor market is showing signs of a slowdown, reinforcing expectations of a rate cut.
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