Synopsis: Muthoot Finance Ltd (NSE: MUTHOOTFIN) shares crashed 14% to an intraday low of ₹3,577 on February 13, 2026, despite reporting a massive 95% YoY surge in Q3 net profit to ₹2,656 Crore. The “Friday the 13th” bloodbath was triggered by a 4x spike in bad debt write-offs, persistent stress in its Belstar Microfinance subsidiary, and a classic “sell on news” reaction after the stock hit record highs earlier this week.
On February 13, 2026, shares of Muthoot Finance Ltd experienced a brutal reversal, plunging as much as 14% to ₹3,577 on the NSE. This sharp decline comes less than 24 hours after the gold loan giant reported blockbuster Q3 FY26 earnings that saw profits nearly double. The stock, which had been riding a 5-day winning streak and touched all-time highs near ₹4,150, fell victim to aggressive profit booking as investors looked past the headline growth to uncover cracks in asset quality.
The sell-off has wiped out billions in market capitalization in a single session, significantly underperforming the broader Nifty 50 which fell nearly 1%. While management remains bullish, raising its FY26 AUM growth guidance to 45%, the market is currently fixated on rising operational risks and the “higher-for-longer” interest rate environment.
Why is Muthoot Finance stock falling today?
The primary driver of today’s crash is a significant jump in Bad Debts Written Off, which surged to ₹207 Crore this quarter compared to just ₹53 Crore in the previous year. While this represents a small fraction of the total ₹1.48 Lakh Crore AUM, the 4x growth rate has raised alarm bells regarding future margin stability.
Additionally, the company’s microfinance arm, Belstar Microfinance, remains a point of contention. Despite returning to a slim profit of ₹51 Crore in Q3, the subsidiary reported a loss of ₹109 Crore for the first nine months of FY26. With Stage III assets (bad loans) in the MFI segment rising to 4.93%, investors are wary of the unsecured lending risks overshadowing the steady gold loan business.
Muthoot Finance Q3 FY26: The Divergence of Data
| Key Metric | Q3 FY26 (Current) | Q3 FY25 (YoY) | Growth / Change |
| Net Profit (PAT) | ₹2,656 Cr | ₹1,363 Cr | 95% ↑ |
| Total Income | ₹7,263 Cr | ₹4,429 Cr | 64% ↑ |
| Bad Debts Written Off | ₹207 Cr | ₹53 Cr | 290% ↑ |
The “Analyst Consensus” on Muthoot Finance
Top brokerages maintain a long-term ‘Buy’ rating but acknowledge the immediate technical damage and valuation concerns.
- Jefferies: Maintained a ‘Buy’ with a target of ₹4,750, noting that while PAT beat estimates, the sequential dip in gold tonnage (down 2%) and lower Loan-to-Value (LTV) ratios are minor negatives.
- Motilal Oswal: Remained ‘Neutral’, highlighting that gold price volatility could cap near-term gains despite the robust 51% AUM growth.
- Technical View: Analysts at Angel One noted a “bearish kicking pattern” on the charts after the stock opened with a massive gap down, suggesting further support may only be found at the ₹3,400 level.
The Bottom Line
Muthoot Finance’s 14% crash is a classic example of the market “pricing in the good news” and “selling on the fine print.” While the core gold loan business remains a powerhouse with ₹1.40 Trillion in AUM, the spike in write-offs and MFI stress has turned this “Friday the 13th” into a reality check for aggressive bulls.
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