Muthoot Finance shares plunge even as Q3 PAT zooms 95% YoY; here's why

Shares of Muthoot Finance Ltd plunged sharply in Friday's trade despite the gold loan financier posting a strong set of third-quarter results. Last checked, the stock was down 11.52 per cent at Rs 3,600.15. At this level, it has rallied 43.39 per cent over the past six months.

The company posted a consolidated profit after tax (PAT) of Rs 2,656 crore for Q3 FY26, compared with Rs 1,363 crore in the year-ago period, marking a robust 95 per cent year-on-year (YoY) increase. 

In terms of business growth, standalone loan assets under management (AUM) touched Rs 1,47,552 crore as of December 31, 2025, recording a YoY growth of 51 per cent.

However, a market expert said today's sharp correction reflects concerns around the sustainability of earnings.

Ravi Singh, Chief Research Officer at Mastertrust, said, Muthoot Finance shares fell sharply today as the market reacted to concerns beyond headline profit growth. "Profit jumped and loan growth was healthy, but the market looked deeper than just the top-line and bottom-line figures. A meaningful part of the earnings boost came from recovery-related gains, which investors believe may not sustain every quarter. There was also some sequential pressure on core margins, and the pace of adding active customers slowed slightly. Since the stock had already seen a strong rally in recent months, many traders chose to lock in gains once results were announced," Singh stated.

He added, "Momentum remains weak as long as the stock stays below 3,750. Further downside towards Rs 3,300–3,400 cannot be ruled out. Avoid fresh entries. Wait for stability and support confirmation before considering positions."

Jigar S Patel, Senior Manager – Technical Research at Anand Rathi, said support for the stock is seen at Rs 3,500, while resistance is placed at Rs 3,870. He added that a decisive move above Rs 3,870 could push the stock towards Rs 3,950, with the expected short-term trading range pegged between Rs 3,500 and Rs 3,950.