More Stories

Informist, Monday, Feb. 10, 2025

By Vaishali Tyagi

MUMBAI – Muthoot Finance Ltd.'s net profit is seen rising over 29% on year to INR 13.26 billion for the December quarter, according to the average of estimates from six brokerages. Sequentially, the bottom line is seen rising around 6%. The non-banking finance company's net profit is seen in the range of INR 12.90 billion-INR 13.71 billion. A rise in loan book and net interest income is expected to support the company's profitability in the reporting quarter. The net interest income of the company is seen rising 38% on year and 4.4% on quarter to INR 26.3 billion in Oct-Dec. 

Most brokerages expect a contraction in the financier's net interest margin this quarter. Kotak Institutional Equities expects the net interest margin to contract "reflecting both moderation in yields and rise in cost of funds". On a quarterly basis, Nirmal Bang expects the company's margin to contract by 21 basis points, while Motilal Oswal anticipates a 30 bps reduction. In the September quarter, the non-bank lender's net interest margin was 11.54%, slightly up from 11.51% in the June quarter.

Brokerages expect the company's provisions to rise sharply on year, but fall sequentially. As of Sept. 30, its provisions stood at INR 3.5 billion. The company had reported a provisional coverage ratio of 14.52% as of Sept. 30. 

Analysts will closely watch the commentaries on gold loan growth and margin guidance. Other key parameters to be monitored include the outlook on business, updates on microfinance institutions, and home finance business. Stable gold prices and subdued competition are expected to support loan growth for the gold book. Muthoot's standalone loan assets under management reached a record high of INR 901.97 billion as of Sept. 30, up 31% on year. Gold loan assets rose 28% on year to INR 861.64 billion as of Sept. 30.

The cost of borrowings for the Kerala-based lender are expected to fall in the Oct-Dec quarter, reports said. In the previous quarter, the management had said the cost of borrowing had peaked and was likely to remain stable at 9%. In November, the gold financier got approval from the Reserve Bank of India to raise $1 billion through external commercial borrowings.

In terms of asset quality, the gross stage-3 ratio rose to 4.30% as of Sept. 30. Guidance on asset quality as well as number of gold auctions will also be monitored when the company announces its earnings for the December quarter Wednesday. On Monday, shares of the company closed 1.9% lower at INR 2,201.85 on the National Stock Exchange.

Following are the Oct-Dec earnings estimates, in INR million, for Muthoot Finance from six brokerages, in descending order of net profit:

End

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.