Despite gold prices hitting record highs, analysts aren't gung-ho about the outlook for gold financiers, Muthoot Finance and Manappuram Finance. This, they said, was due to intense competition from banks, coupled with stagnating loan book and likely pressure on margins.
"The going seems to be tough for gold financiers to achieve gold asset under management (AUM) growth, amid intense competition and pricing pressure. Moreover, microfinance, commercial vehicles, home loan, MSME/personal loans are performing better than gold loans," said analysts at Prabhudas Lilladher.
Higher gold prices mean customers seeking loans would get more money on their gold holdings. The yellow metal hit a record high of Rs 58,826 per 10 grams on the Multi Commodity Exchange (MCX) earlier this month, and has rallied 2.4 per cent so far this calendar year.
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