Crisil Ratings in its latest report has said that profitability of non-banking financial companies (NBFCs) specialising in gold loans is likely to remain healthy at 4.25-4.5 per cent in this fiscal (FY26) and next (FY27), supported by strong demand, improving operating leverage and low credit losses despite increasing competition from banks and diversified NBFCs.  

The report said assets under management (AUM) of NBFCs focused on gold loans is expected to grow at a compound annual growth rate (CAGR) of around 40 per cent between the current and next fiscal year, significantly outpacing branch additions and boosting productivity. In the first nine months of FY26, branch productivity for these entities rose about 30 per cent. Average AUM per branch for large gold-loan NBFCs increased to about Rs 21 crore, while for mid-sized peers it rose to around Rs 11.5 crore.   

The report attributed a large part of this growth to the sharp increase in the gold prices over the past year. Additionally, it said shift in demand away from unsecured credit to gold loans, along with recent regulatory developments affording higher loan-to-value norms and flexibility on branch network expansion, is expected to further support growth prospect.