Gold-price volatility likely to cap gains for Muthoot Finance's stock

Muthoot Finance posted robust Q2FY26 earnings driven by higher gold prices and strong AUM growth, but analysts flag risks from yield pressure, NIM compression and regulatory uncertainty

Muthoot Finance had excellent Q2FY26 (second quarter of 2025-26) results which is unsurprising since its prospects are directly linked to gold price trends. The company has decent asset quality and good growth prospects. But competition in gold finance is intense. There’s likely to be pressure on yields and net interest margin (NIM) compression in the medium term.

 

While the bull-run in gold continues, the earnings trajectory is good. While most analysts are positive on the stock, with some advocating caution on the basis of the vulnerability to gold price trends and the anticipation of NIM and yield compression.

 

Muthoot reported