Gold prices soar, boosting gold loan companies' shares
Gold prices in India soared to ₹11,864 per gram on October 1, thanks to strong demand and global uncertainty.
This jump gave a nice boost to gold loan companies like Manappuram Finance and Muthoot Finance—both saw their shares rise by up to 2% after brokerages upgraded their outlooks, influenced by higher gold prices.
With gold prices high and regulatory changes supporting lending, these companies are expected to see bigger profits from their gold loan portfolios.
Price targets raised for Muthoot and Manappuram
If you're interested in finance or investing, these moves show how global events can directly impact Indian markets—and even your portfolio.
CLSA, a major brokerage, raised its price targets for both firms (Muthoot now at ₹3,600; Manappuram at ₹310), predicting record highs ahead.
Gold's record quarterly jump and LTV ratios
CLSA pointed out that gold prices jumped 20% in just one quarter—the biggest leap in recent memory.
Plus, both companies' loan-to-value ratios are still below average (Muthoot at 62%, Manappuram at 57%), meaning there's room for safer lending growth.
RBI has also allowed higher LTV on smaller loans, making it easier for people to get cash when they need it.
Muthoot's growth forecast and investor response
CLSA expects Muthoot's assets under management to grow by about 23% each year and profits by 37% annually through FY2027—driven by higher gold prices, gradual LTV increases, and steady tonnage growth.
Investors responded quickly: on October 1st, Manappuram shares closed up nearly 2%, while Muthoot finished the day up by the same margin.
Gold is shining bright—not just as jewelry but as a financial lifeline and opportunity right now.