Manappuram Finance pushes the pedal on gold loans as other businesses lose sheen

Harsha Jethmalani
2 min read12 Aug 2026, 12:04 PM IST
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Manappuram is targeting around 25-30% growth in gold loans in FY27, while peer Muthoot Finance is targeting 15%.
Summary
Manappuram Finance’s Q1 profit rebound was powered by a near-doubling in gold loan AUM, but muted non-gold businesses, rising competition and regulatory changes could test its growth momentum.

After a muted FY26, Manappuram Finance saw profitability pick up in the June quarter (Q1FY27), with gold loans doing the heavy lifting and compensating for muted growth in its non-gold businesses.

Consolidated assets under management (AUM) grew 57% year-on-year to 69,635 crore, with gold loan AUM nearly doubling to 57,006 crore. Gold loans contributed 82% to consolidated AUM in Q1FY27, compared with 65% a year ago.

Higher gold prices and a gradual shift towards formalized financing buoyed gold loan demand even in a seasonally weak Q1. Manappuram is targeting around 25-30% growth in gold loans in FY27, while peer Muthoot Finance is targeting 15%.

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Doubling down

Gold loan yield rose 60 basis points sequentially to 17.7% in Q1FY27, driven by corrective pricing actions. The profitability metric is expected to remain around 18%.

Manappuram is aggressively strengthening its gold lending franchise. It plans to open 500 new gold loan branches in FY27 following the removal of the Reserve Bank of India’s (RBI) prior-approval requirement.

While Manappuram has a more diversified lending portfolio than Muthoot, it is prioritizing asset quality and portfolio stabilization in its non-gold lending segments. Its long-term strategy is to keep 75% to 80% of consolidated AUM in gold loans, while capping microfinance exposure at 8% to 10%, compared with around 7% currently.

Also Read | Muthoot Finance: Is the Midas touch fading?

In vehicle finance, lending has been temporarily stopped as the company focuses on collections amid elevated GS-3 and asset-quality concerns.

Leadership test

Manappuram appointed Ashish Singh as its new MD and CEO, effective 1 January 2027. Under the new leadership, it plans to improve the performance of its diversified businesses through disciplined underwriting, with a thrust on sustainable profitability.

While this completes the leadership transition, Singh faces an uphill task of improving profitability following a sharp moderation in gold loan yields over the last two quarters, said HDFC Securities. It cautions that loan growth could decelerate significantly due to consolidation in gold prices, elevated competitive intensity and the RBI’s new regulations on loan-to-value norms.

Also Read | Tata, Godrej buy into India’s booming gold loan market

So far in CY26, Manappuram's stock is up 13%, compared with a 24% decline in Muthoot Finance.

“This divergence could be due to margin outlook; Manapurram’s calculated NIM bottomed out last quarter and improved by 50bps sequentially to 10%, while Muthoot saw 300bps contraction,” said Akshat Agrawal, analyst at Nirmal Bang Institutional Equities.

Manappuram's RoA and RoE improved to 3.2% and 13.6%, respectively, in Q1FY27 from 2.8% and 11% in FY26. However, that improvement is largely captured in the current valuation, limiting the scope for further rerating, he added.

About the Author

Harsha Jethmalani is a Deputy Editor at Mint with over a decade of experience covering stock markets and corporate India. As a key member of the Mark to Market team, she specializes in delivering cutting-edge commentary on market trends, the economy, and corporate financial reports.<br><br>Born and raised in Mumbai, Harsha’s entry into business journalism was a serendipitous pivot. Graduating during the 2008–2009 financial crisis, her initial goal of becoming a research analyst at an MNC was rerouted. However, what began as a chance career move quickly became a conscious choice; she discovered that financial journalism is a powerful storytelling tool capable of influencing and empowering the financial decisions of a massive audience.<br><br>Harsha began her career in 2009 at IRIS Business Services (Myiris.com), tracking mutual funds and interviewing fund managers. In 2011, she joined the Network18 Group, writing extensively on equity market trends for Moneycontrol.com and hosting pre- and post-market audio updates. Following a stint covering personal finance at Dalal Times, she joined Mint in 2016 as a Content Producer, steadily rising through the ranks to her current editorial position.<br><br>A defining highlight of her tenure at Mint was her extensive coverage of India's historic Goods and Services Tax (GST) reform. She chronicled the massive indirect tax overhaul from its initial conceptual and execution hurdles to its eventual streamlining. Her impactful reporting earned official recognition when her article exposing a spike in gold smuggling ahead of the GST rollout was formally acknowledged by the Office of the Director General of Audit (Central), Kolkata. Currently, Harsha closely tracks the IT, cement, real estate, and paint sectors. Her sharp news sense and ability to spot emerging trends consistently bring fresh, actionable perspectives to market analysis.<br><br>She holds a postgraduate degree in financial markets from Indira Gandhi National Open University and a Bachelor of Management Studies from Vivekanand Education Society, Chembur, Mumbai.

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