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Informist, Wednesday, Feb. 12, 2025

By Sachi Pandey

MUMBAI – Muthoot Finance Ltd. Wednesday reported an all-time high net profit of INR 13.63 billion for the December quarter, an increase of nearly 33% from INR 10.27 billion a year earlier. This growth was primarily driven by a surge in loan assets under management, which were also at an all-time high, the management said in a press release. On a sequential basis, the net profit rose 9% from INR 12.51 billion in Oct-Dec.

Despite the record high profit, the company's net profit slightly missed analysts' forecasts. Six brokerage estimates had predicted a 29% rise to INR 13.26 billion in Oct-Dec, driven by growth in its loan book and net interest income.

Muthoot Finance's standalone loan assets under management were at a record high of INR 974.87 billion as on Dec. 31, up 37% from the previous year. Its gold loan assets rose by 34% year-on-year to INR 929.64 billion.

This surge in assets under management led to a 39.5% jump in total income to INR 44.31 billion for the quarter, from INR 31.76 billion last year. However, total expenses for the period surged by 43.8% to INR 25.81 billion from INR 17.95 billion last year.

Muthoot Finance's total revenue from operations for Oct-Dec rose 40% year-on-year to INR 44.23 billion, with interest income alone contributing INR 43.69 billion. In comparison, the company reported revenue of INR 31.68 billion for the same period last year, and INR 41.17 billion in Jul-Sept.

The net interest margin for the reporting quarter was 11.60%, compared to 11.54% in Jul-Sept. The company also reported its highest-ever gold loan disbursements to new customers, with INR 157.23 billion in loans given to over 1.37 million new customers in Apr-Dec.

The country's largest gold financing company in terms of loan portfolio reported a 23% year-on-year increase in profit after tax for the Apr-Dec period to INR 36.93 billion, from INR 29.93 billion same period previous year. Total revenue from operations for this period rose to INR 122.45 billion, compared to INR 92.26 billion last year.

Muthoot Finance alone contributed to 93% of the group's consolidated profit after tax, and its loan assets accounted for 86% of the group's consolidated loan assets under management.

"In line with our vision to emerge as a diversified financial services provider, we are actively expanding our new product portfolio, including business loans, SME (small medium enterprises) Loans, Loan against Property, and Personal Loans. These offerings complement our core Gold Loan business, providing customers with tailored financial solutions while enabling us to broaden our customer base and revenue streams," George Jacob Muthoot, chairman of the Muthoot Group, said.

The company also aims to increase the share of non-gold loan segments and subsidiaries. "As we scale up our non-gold loan segments and enhance the contribution from subsidiaries, we are on track to grow their share to 18%-20% over the next five years," Jacob Muthoot added.

The company has tempered its disbursements due to challenges in the microfinance sector and is focusing on strengthening collections. George Alexander Muthoot, managing director of Muthoot Finance, said that "We have tempered disbursements in response to challenges faced in microfinance sector, and our focus continues to be on strengthening collections and enhancing quality of loan book." He added that the company expects issues the sector faces to be resolved within the next few quarters.

In a press release, the gold loan financier highlighted disbursements averaging INR 242 billion per month, with collections averaging INR 219 billion average monthly.

The non-banking financier said that its board has approved raising funds through non-convertible debentures on a private placement basis. The company plans to raise up to INR 211 billion in multiple tranches. It has raised $400 million through global bond issuance.

Muthoot Finance announced its earnings after market hours on Wednesday. The company's shares ended 0.2% lower at INR 2,182.85 on the National Stock Exchange.  End

Edited by Ashish Shirke

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