Gold Loan Giants Surge 2-8% as JPMorgan Gives Overweight Ratings

⚡ Key Financial Takeaways

JPMorgan’s note gave all three gold‑loan companies an overweight rating, lifting IIFL Finance 8%, Muthoot Finance 2.15% and Manappuram Finance 2%.

Price targets were set at ₹750 for IIFL, ₹3,400 for Muthoot and ₹395 for Manappuram, implying upside potentials of 18%, 14% and 13% respectively.

JPMorgan forecasts that gold‑loan share of system credit could rise to 10% in five years, signalling a shift from a cyclical to a structural growth driver.

JPMorgan’s Overweight Endorsement Drives Gains Shares of IIFL Finance, Muthoot Finance and Manappuram Finance jumped between 2% and 8% on Friday after JPMorgan launched coverage with an ‘overweight’ rating. IIFL Finance surged 8% to an intraday high of ₹687.10 before settling at ₹678.05, up 6.49% by 1:30 pm. Muthoot and Manappuram added 2.15% and 2% respectively, reflecting the market’s confidence in the gold‑loan sector.

Price Targets and Upside Potential JPMorgan set a price target of ₹750 for IIFL Finance, suggesting an upside of 18% based on early‑stage turnaround signals. For Muthoot Finance, the target of ₹3,400 implies a 14% upside, with the brokerage noting a 22% year‑to‑date decline that offers a compelling entry point. Manappuram Finance’s target of ₹395 translates to a 13% upside, citing June‑quarter results that confirm the beginning of a turnaround.

Gold Loan Market Outlook The note highlighted that gold loans in India are secured retail credit and have shown robust growth. JPMorgan projects the share of gold loans in system credit could rise to 10% over the next five years from 5% in FY 2026, driven by a cultural shift that views gold as a monetisable asset rather than a family heirloom. This structural shift is expected to underpin long‑term growth for the sector.