Muthoot Finance Q1FY22 results: Net profit rises 14% to Rs 979 cr

The non-banking finance company's total income increased 14% to Rs 2,963 crore

Gold loan finance major Muthoot Finance Ltd (MFIN) has posted a 14 per cent jump in consolidated net profit for the first three months of FY22 to Rs 979 crore compared to Rs 858 crore during the April to June period of FY21, owing to an improved performance on gold loans.

The non-banking finance company’s total income rose by 14 per cent to Rs 2,963 crore during the quarter under review, up from Rs 2,607 crore during the first quarter of 2020-21. Compared to last year, the company’s gross loan assets grew by 25 per cent to Rs 58,135 crore during the quarter as against Rs 46,501 crore in the year-ago period.

“We consciously decided to go slow in terms of non-gold lending business on account of continued uncertainty and emerging uncertain credit behavior. On the gold loan front, we are targeting 15 per cent growth in the remaining three quarters,” said George Alexander Muthoot, Managing Director of the company. During the quarter, the consolidated loan assets under management decreased by Rs 145 crore.

The company’s gold loan division posted an increase in net profit by 16 per cent, at Rs 971 crore for Q1FY22 as against Rs 841 crore for Q1FY21. Interestingly, gold loan assets stood at Rs 52,614 crore as compared to Rs 41,296 crore in the previous year, posting a growth of 27 per cent. The total income from the gold loan business too saw a rise of 14 per cent to Rs 2,715 crore during the period under review.

The company’s gross non-performing assets or Stage-III assets on gross loan assets was seen at 3.67 per cent, up from 1.11 per cent during the April to June quarter of the last financial year. Expected credit losses (ECL) provision as a percentage of gross loan assets stood at 4.14 per cent during Q1FY22 as compared to 1.62 per cent during the same quarter last fiscal. Capital adequacy ratio was seen at 27.32 per cent from 26.30 per cent during the same quarter last year.