Muthoot Finance, one of India’s leading non-banking financial companies (NBFCs) specializing in gold loans, has received the Reserve Bank of India’s (RBI) approval to expand its branch network. The company announced on February 26 that the central bank has granted permission to establish 115 new branches across India.
As part of regulatory compliance, Muthoot Finance must provide the RBI with detailed information regarding the locations and operational setup of these branches. Additionally, the central bank has instructed the company to implement stringent security measures for storing gold jewelry. This includes ensuring robust security systems and setting up secure deposit vaults in all new branches to safeguard customers' assets effectively.
The financial services provider continues to report impressive growth in its earnings. For the quarter ending December 2024, Muthoot Finance recorded a significant 32.7% increase in net profit, reaching ₹1,363 crore compared to ₹1,027.3 crore in the corresponding quarter of the previous fiscal year.
Similarly, the company's net interest income (NII) witnessed a 42.8% growth, surging to ₹2,721.4 crore from ₹1,905.7 crore in the previous year. This substantial increase in revenue highlights Muthoot Finance’s strong market position and growing demand for gold loan services.
Muthoot Finance’s financial results outperformed market projections. Analysts had estimated the company’s net profit to be ₹1,311.1 crore, while the anticipated NII was ₹2,586.7 crore, according to a CNBC-TV18 poll. However, the company surpassed these expectations, reflecting its robust performance and sustained growth trajectory.
Despite strong financial results, Muthoot Finance shares closed 0.5% lower at ₹2,177.55 per share on the Bombay Stock Exchange (BSE) on February 26. However, the company has shown a steady uptrend over the past six months, with its stock price appreciating by 12.46%.
Market analysts believe that the company’s expansion plan, combined with its strong financial health, will boost investor confidence and contribute to long-term stability.
With the approval of 115 new branches, Muthoot Finance aims to enhance its accessibility to customers across urban and rural regions. The expansion aligns with its long-term goal of strengthening its presence in the Indian financial sector.
The addition of new branches will allow more individuals, especially those in underserved areas, to access quick and reliable gold loan services. The company has emphasized that security and customer service remain top priorities in its expansion strategy.
Muthoot Finance’s consistent performance and aggressive expansion strategy indicate a positive outlook for the coming years. With the demand for gold loans increasing, particularly in times of financial uncertainty, the company is well-positioned to capitalize on market opportunities.
Additionally, its adherence to RBI regulations and focus on security measures further reinforce customer trust. The company is expected to maintain its growth trajectory, offering competitive financial products and expanding its footprint across India.