BENGALURU: Indian gold loan financier Muthoot Finance beat fourth-quarter profit estimates on Wednesday, aided by strong loan demand amid high prices of the precious metal.
Gold prices hit multiple record highs during the quarter. Rising gold prices increase how much a customer can borrow against bullion, benefiting gold financiers in terms of loans issued.
Additionally, analysts said that as unsecured lending continued to slow due to rising bad loans, people began shifting towards gold loans as an alternative source of funds.
Muthoot Finance’s profit for the January-March quarter came in at 15.08 billion rupees ($176.6 million), compared to analysts’ average estimate of 14.91 billion rupees, as per data compiled by LSEG.
Its standalone loan assets under management – excluding units such as Muthoot Homefin and Belstar Microfinance – rose 43% year-on-year to 1.09 trillion rupees at the end of the quarter.
The company’s interest income rose about 42% to 47.84 billion rupees.
Smaller rival Manappuram Finance reported a surprise loss earlier this month, hurt by rise in stress in its microfinance arm.
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