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India's Muthoot Finance reported quarterly profit growth for the first quarter in six, as record high prices spurred demand for gold loans.

The gold financing company said its profit grew more than 21%, to 9.75 billion rupees ($117.81 million), for the first quarter ended June 30.

Muthoot's interest income, which is the difference between interest earned and paid, rose 19.2%, to 29.58 billion rupees. Gold prices hit record high levels this quarter - high prices benefit gold loan lenders as customers pledge more bullion as collateral, pushing up credit sizes.

The average loan ticket size grew by 14% year-over-year in the quarter while the total weight of pledged gold jewellery rose by 2%, the company said in a filing.

Increasing acceptance of gold financing in the north- and west- Indian markets also aided the south India-centric Muthoot and its smaller rival Manappuram Finance, analysts said.

Manappuram reported a 76% rise in Q1 profit earlier in the week.

"We continue to foresee improved demand conditions for gold loans... in the current financial year," Muthoot Group Chairman George Jacob Muthoot said in a statement.

"The results have surprised us and beaten our estimates, especially on the gold loan side, on the back of sustained active customer count and supportive asset prices," said Shweta Daptardar, research analyst at brokerage Elara Capital.

"Going ahead, we expect Muthoot to be a steady performer," she said.

Total expenses for the Kochi, Kerala-based company rose almost 20%, to 17.12 billion rupees, led by higher finance costs.

The company missed street profit estimates of 9.86 billion rupees, according to Refinitiv IBES data.

Shares of Muthoot Finance closed 1.08% down ahead of results, taking its year-to-date gains to 27%.