Muthoot Finance shares tumbled 14.4 per cent on Monday after the company’s June quarter earnings triggered mixed reactions from brokerages, with concerns over margin compression outweighing healthy loan growth and a 25 per cent rise in profit.The gold loan lender reported a profit after tax of ₹2,550 crore in Q1FY27, compared with ₹2,046 crore in the corresponding quarter.The board has also recommended the appointment of Alexander George as the Managing Director of the company, effective October 1.At around 10 am, the stock traded at ₹2,809, hitting a low of ₹2,671 compared to ₹3,119.60 previous close on the NSE.Global brokerage Bernstein maintained an outperform rating with a target price of ₹4,500. The brokerage said Q1 was a mixed quarter, with healthy gold loan AUM growth overshadowed by a sharp 300 bps contraction in net interest margin as asset yields normalised from elevated levels seen in H2FY26.It said management expects yields to stabilise at 18-18.5 per cent, but selective rate reductions, a higher mix of lower-yielding loans and limited relief on funding costs could keep profitability under pressure. Bernstein added that while asset quality remains stable, the margin reset adds pressure to the current earnings growth trajectory.CLSA maintained an outperform rating and cut its target price to ₹4,000. The brokerage said Q1 profit after tax missed its estimate by 16 per cent, largely due to a net interest income miss driven by sharper-than-expected yield compression of around 300 bps. It noted that customer count grew 2.5 per cent q-o-q after declining for two quarters and said the company appears to have shifted its earlier stance from profitability over growth. CLSA added that AUM grew 6 per cent q-o-q despite a 4 per cent q-o-q correction in gold prices, while operating expenditure growth of 21 per cent y-o-y was higher than expected.Morgan Stanley maintained an overweight rating with a target price of ₹3,705. The brokerage described the quarter as decent, saying higher consensus estimates made the earnings miss appear worse. It said net interest margin missed estimates, although the overall miss was contained by better loan growth. Morgan Stanley added that consensus estimates were unusually high given weak average gold prices q-o-q and elevated one-off yields in FY26.Meanwhile, Jefferies downgraded the stock to hold and cut its target price to ₹3,300. The brokerage said Q1 profit after tax grew 25 per cent y-o-y to ₹25.5 billion but missed its estimate by 18 per cent as net interest margins fell sharply due to yield normalisation, rollover to lower rate slabs and price cuts amid competition.Jefferies said competition and range-bound gold prices are likely to weigh on earnings per share growth in FY27 and cut its FY27 and FY28 earnings estimates by 7 per cent and 8 per cent, respectively.Domestic brokerage Motilal Oswal maintained a neutral rating with a target price of ₹2,850. The brokerage said FY27 started on a relatively weak footing as lower gold loan yields and margin moderation weighed on profitability despite healthy gold loan growth and customer additions. It said the industry has entered a more competitive phase with aggressive pricing compressing yields and incremental earnings are likely to depend more on balance sheet expansion than margin resilience.Motilal Oswal expects FY26 to have marked a cyclical peak in profitability and cut its FY27 and FY28 estimates by around 17 per cent and 7 per cent, respectively, to reflect sharp net interest margin compression.Published on August 3, 2026