Manappuram, Muthoot zoom up to 82% in 2025; what's driving gold financiers?

Thus far in the calendar year 2025, Muthoot Finance zoomed 82%, while Manappuram Finance soared 65%. In comparison, the BSE Sensex rose 9%.

Shares of gold finance companies Muthoot Finance and Manappuram Finance hit their respective all-time highs, gaining on the BSE during Wednesday on expectation of healthy earnings.

 

In comparison, the benchmark BSE Sensex was down 0.14 per cent, closing at 85,408.

 

Among individual stocks, Manappuram Finance surged 6.7 per cent to ₹314.55 at close. The stock surpassed its previous high of ₹298 touched on September 17, 2025.

 

Shares of Muthoot Finance gained 2 per cent to ₹3,887.65 in intraday deals and surpassed its earlier peak of ₹3,869.45 hit on December 15. It, however, ended the day marginally lower by 0.35 per cent at ₹3,793 a share.

 

 

Meanwhile, so far in 2025, Muthoot Finance has zoomed 87 per cent, while, Manappuram Finance soared 69 per cent. In comparison, the BSE Sensex was up 9 per cent during the same period.

 

Spot gold prices hit a record high of $4,439 per ounce amid growing prospects of further US interest rate cuts in the coming year. Gold's rally has also been driven by higher safe-haven demand after the US stepped up pressure on Venezuela last week, raising geopolitical risks in the region.

 

In the September quarter, gold loan companies were outperformers among non-banking financial companies (NBFCs) as they posted a 34-38 per cent rise in loan growth.

 

Muthoot Finance has benefited from the tailwinds of a sharp rise in gold prices and an improvement in gold loan demand due to the industry-wide rationing in the unsecured credit.

 

Muthoot is indeed one of the best franchises for gold loans in the country. It has the ability to deliver industry-leading gold loan growth and best-in-class profitability, according to Motilal Oswal Financial Services.

 

The company delivered a healthy all-round beat in the quarter, even after adjusting for the one-offs in interest income.

 

Gold loan growth remained strong, while asset quality improved on the back of recoveries from the non-performing asset (NPA) pool. Net interest margins (NIMs) and spreads also expanded during the quarter, driven by higher yields and a decline in cost of funds (CoF).

 

With a favourable demand outlook for gold loans, driven by the limited availability of unsecured credit, the company is well-positioned to maintain its healthy loan growth momentum, the brokerage firm said in its Q2 results update.

 

Currently, Muthoot Finance is trading above the brokerage firm’s target price of ₹3,800 per share.

 

As regards Manappuram, analysts at Axis Direct in the Q2 results update said the company will continue to focus on accelerated growth in the gold loan portfolio. Growth would primarily be driven by higher ticket size and expectations of strong customer additions.

 

In the near term, the non-gold portfolio will continue to consolidate, before resuming growth momentum in a calibrated manner. This comes as the company re-looks into its profitability and asset quality.

 

As Manappuram continues to align its gold loan yields with its peers, it would be a drag on NIMs.

 

However, that would be offset by declining CoF, as the company remains focused on maintaining margins at current levels, the brokerage firm said. The stock trades above the target price of ₹285 per share.