Muthoot Finance Q1 Net Profit Nearly Doubles on Strong Growth, Margin Expansion

Muthoot Finance Ltd.'s net profit for April–June almost doubled on year to ₹20.46 billion from ₹10.79 billion, driven by strong business growth and margin expansion. Sequentially, profit rose 35.7%. Net interest income jumped over 50% to ₹34.73 billion, while net revenue from operations surged 54% to ₹57.03 billion, marking its fastest growth in at least 39 quarters.

Total expenses rose 34% to ₹29.75 billion as employee costs increased 31.3% to ₹5.03 billion, but impairments on financial instruments dropped sharply to ₹433 million from ₹2.24 billion a year ago. Borrowings climbed 57% on year to ₹1.03 trillion.

Gold loan disbursement to new customers was up 12.5% to ₹63.55 billion, aided by a 6.8% rise in gold prices. Gold loan assets rose 40% to ₹1.13 trillion, backed by 209 tonnes of gold as collateral. The average loan ticket size increased 23% to ₹108,224.

Asset quality improved with gross stage III assets down to 2.58% from 3.41% in March, and net stage III assets easing to 2.10% from 2.79%. Capital Adequacy Ratio stood at 21.96% against 23.71% a quarter earlier.

The board approved equity infusions of ₹5 billion in Muthoot Money Ltd. and ₹2 billion in Muthoot Homefin (India) Ltd., both wholly owned subsidiaries.