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Informist, Wednesday, Aug. 13, 2025

By Aaryan Khanna

NEW DELHI – Muthoot Finance Ltd.'s net profit nearly doubled on year in the June quarter as its business growth jumped on year and margins expanded. The bottom line was sharply higher than analysts' already rosy estimates. The growth in profit after tax and net revenue from operations was the highest in at least 39 quarters, since Oct-Dec 2015.

The gold financier posted a net profit of INR 20.46 billion in the reporting quarter, up from INR 10.79 billion a year ago. The bottom line was expected to rise to INR 15.71 billion, according to the average estimate from five brokerages. The net profit also surged 35.7% from the trailing quarter.

Consequently, the Kerala-based lender's net interest income--the difference between interest earned and expended--rose over 50% on year to INR 34.73 billion in the June quarter. The average analyst estimate was INR 30.91 billion, and the reported number was far above the highest estimate as well. Net revenue from operations was up 54% on year, growing at a record pace for the second straight quarter, to INR 57.03 billion in Apr-Jun. Other income was negligible.

On the expenses front, employee costs rose 31.3% to INR 5.03 billion in the June quarter. However, impairment on financial instruments fell sharply to INR 433 million from INR 2.24 billion a year ago. This helped keep the rise in total expenses slower than the top line, at 34% to INR 29.75 billion. The firm's borrowing rose sharply to INR 1.03 trillion as of Jun. 30, up 57% on year and 15% on quarter, though Muthoot Finance said that it came from stable sources.

Gold loan disbursement to new customers rose 12.5% on year to INR 63.55 billion as on Jun. 30. The value of the disbursement was likely helped by the 6.8% rise in gold prices during the quarter, according to MCX near-term futures data. Overall gold loan assets loans rose 40% on year to INR 1.13 trillion.

India's largest gold financing company holds over 209 tonnes of gold as security as on Jun. 30, up marginally from March and from 194 tonnes a year ago. Its average loan ticket size grew 23% on year to INR 108,224 in the June quarter. Muthoot Finance's Capital Adequacy Ratio stood at 21.96% as of Jun. 30, from 23.71% a quarter ago.

With impairments down, asset quality improved sharply in the June quarter. The lender's gross stage III asset ratio fell to 2.58% as on Jun. 30 from 3.41% a quarter ago, and 3.98% a year ago. Net stage III asset ratio declined to 2.10% at June-end, from 2.79% on Mar. 31 and 3.48% a year ago.

Along with the result, the board also approved equity infusions worth INR 5 billion in Muthoot Money Ltd. and INR 2 billion in Muthoot Homefin (India) Ltd., both of whom are wholly owned subsidiaries of Muthoot Finance. On Wednesday, shares of Muthoot Finance closed 0.9% lower at INR 2,509.90 on the National Stock Exchange. The company declared its June quarter results post market hours.  End

Edited by Vandana Hingorani and Deepshikha Bhardwaj

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