Muthoot Finance Shares Plunge 12% Despite Strong Q3 Profit Surge Amid Gold Price Drop

nce tumbled over 12% on February 13, 2026, marking one of its sharpest single-day declines in recent years, even as the gold loan major reported a near-doubling of quarterly profit. The stock fell as much as 12% intraday, trading around ₹3,550–₹3,610 levels in afternoon trade (from a previous close near ₹4,067), while the benchmark Nifty 50 dipped about 1%. The company announced Q3 FY26 results on February 12, posting a 95% year-on-year jump in net profit to ₹2,656 crore (from ₹1,363 crore). Net interest income rose 64% to ₹4,467 crore, and gold loan assets under management (AUM) grew strongly by around 50% YoY to approximately ₹1.4–1.48 lakh crore, benefiting from elevated gold prices earlier and shifts from unsecured lending. However, investors reacted negatively, questioning the sustainability of the earnings boost. Analysts noted a significant portion of the profit came from non-recurring recoveries on non-performing loans (e.g., ~₹6.4 billion as per some estimates), rather than core operational momentum. Valuations were seen as stretched with "no margin of error," per Ambit Capital. Compounding the pressure, gold prices dropped sharply by about 3% on February 12, breaking below the $5,000-per-ounce level (spot gold fell to around $4,915–$4,935/oz amid strong US jobs data and reduced Fed rate-cut expectations), raising concerns for gold financiers dependent on high gold values. The sell-off spilled over to peers, with Manappuram Finance and IIFL Finance also seeing rub-off declines.