IDBI Capital
Target: ₹4,060
CMP: ₹3,313.05
delivered an exceptional FY26 performance, driven by strong gold loan demand, higher yields and sharp improvement in profitability.
Consolidated AUM grew about 49 per cent y-o-y, led by about 54 per cent growth in gold loan AUM, while standalone PAT surged ~95 per cent YoY.
Management highlighted that the business has entered a structurally stronger growth phase, supported by elevated gold prices, rising average ticket sizes and sustained demand from self-employed and MSME borrowers.
Yields improved to around 20.8 per cent, aided by selective pricing hikes and auction-related recoveries, helping offset higher borrowing costs and supporting margins.
Asset quality remains comfortable despite the regulatory migration toward borrower-wise NPA recognition, with average LTV at about 57 per cent, significantly below the RBI cap of 85 per cent, providing strong collateral comfort.
Management clarified that the gold duty hike and restrictions on bullion imports won’t materially impact business growth, as the company primarily lends against household jewellery already available in India. It remains positive, driven by sustained gold loan demand, healthy yields, strong collateral cover and continued branch expansion, supporting further market share gains.
We maintain a Buy rating with a revised target price of ₹4,060 based on 2.7x FY28E P/B.