Muthoot Finance

Loan growth strong at 25%, margin eases

Aug 07, 2021 11:08 IST capital market

Muthoot Finance has recorded 15% growth in the net profit on consolidated basis to Rs 977.88 crore for the quarter ended June 2021 (Q1FY2022) over a corresponding quarter of last year.

The company has exhibited steady core operating performance. The company has improved the net interest income growth to 18% in Q1FY2022. The asset quality of the company witnessed some deterioration in Q1FY2022, but with higher provisions net NPA remained nil.

Income from operations improved 14% to Rs 2963.42 crore in the quarter ended June 2021. Interest expense increased 12% to Rs 1085.55 crore, while other expenses (including staff cost of Rs 277.1 crore and other expenses of Rs 193.92 crore) moved up 11% to Rs 471.02 crore. Ensuing Gross profit improved 16% to Rs 1406.85 crore in Q1FY2022 over Q1FY2021.

Depreciation rose to Rs 15.2 crore in Q1FY2022 from Rs 14.02 crore in Q1FY2021, while provision and write offs jumped to Rs 81.8 crore in Q1FY2022 from Rs 43.08 crore in Q1FY2021. PBT increased 14% to Rs 1309.85 crore.

Effective tax rate eased to 25.3% in Q1FY2022 from 25.5% in Q1FY2021. The net profit of the company increased 15% to Rs 977.88 crore in the quarter ended June 2021.

Business performance

The consolidated AUM of the company increased 25% yoy to Rs 58135 crore at end June 2021. The AUM of Muthoot Finance surged 27% to Rs 52614 crore with gold AUM rising 29% to Rs 52069 crore. The AUM of subsidiaries rose 6% to Rs 5521 crore end June 2021.

The net Interest margin (NIM) of the company, on calculated basis, eased by 117 bps on sequential basis to 12.87% in Q1FY2022.

Gross stage 3 assets of the company increased to 1.22% at end June 2021 from 0.88% a quarter ago. ECL Provision as % of Gross Loan Assets increased to 1.24% at end June 2021 from 1.19% a quarter ago.

CRAR ratio was at comfortable level of 27.32% at end June 2021.

Branch network of the company increased to 5443 branches at end June 2021. Employee count declined to 25397 at end June 2021 from 25911 a quarter ago.

Book value of the company stood at Rs 392.0 per share at end June 2021.

Commenting on the results George Jacob Muthoot, Chairman stated, ?As second wave of pandemic hit across the country in the first quarter, amidst selective lock downs at state and local level, we took all efforts to open our branches and maintain our services to the extent possible. Thanks to all our 25000+ workforce, we were able to maintain our Consolidated Loan AUM on QoQ basis inspite of the tough environment. However, compared to last year, Loan assets grew by 25% at Rs 58135 crore. Profit after tax for the quarter increased by 14% at Rs 979 crore compared to last year.?

 ?We consciously decided to go slow in terms of non-gold lending business on account of continued uncertainty and emerging uncertain credit behavior. We are redrawing our strategies in terms of non-gold lending business and we are confident to emerge stronger as environment improves. On Gold Loan front, we are targeting 15% growth in the remaining 3 quarters.?

Muthoot Finance Consolidated Loan Assets under management achieved a yoy increase of 25% at Rs 58135 crore as at Q1FY22 as against last year of Rs 46501 crore. During the quarter, Consolidated Loan Assets under management decreased by Rs 145 crore. Consolidated Profit after tax achieved a yoy increase of 14% of Rs 979 crore as against last year of Rs 858 crore.

Muthoot Finance (MFIN), the largest gold financing company in India in terms of loan portfolio, registered an increase in net profit of 16%, at Rs 971 crore for Q1FY22 as against Rs 841 crore for Q1FY21. Loan Assets stood at Rs 52614 crore compared to Rs 41296 crore previous year, yoy growth of 27%. During the quarter, gold loan assets increased by Rs 142 crore.

Muthoot Homefin (India) (MHIL), the wholly owned subsidiary, has a loan portfolio of Rs 1705 crore as against previous year of Rs 1979 crore. During Q1FY22, loan portfolio increased by approximately by Rs 1 crore. Total revenue for Q1FY22 stood at Rs 46 crore as against Rs 59 crore in the previous year. It achieved a profit after tax of Rs 0.48 crore in Q1FY22 as against Rs 0.41 crore in the previous year. Its Stage III Asset on Gross Loan Asset end June 2021 stood at 5.94% and net of Stage 3 ECL provisions stood at 4.12%.

Belstar Microfinance (BML), an RBI registered micro finance NBFC and Subsidiary Company where Muthoot Finance holds 70.01% stake, grew its loan portfolio to Rs 3072 crore as against last year of Rs 2575 crore, a yoy increase of 19%. It achieved a profit after tax of Rs 2 crore in Q1FY22 as against previous year profit after tax of Rs 15 crore. Its Stage III Asset on Gross Loan Asset % end June 2021 stood at 3.67% and net of Stage 3 ECL provisions stood at 1.25%.

Muthoot Insurance Brokers (MIBPL), an IRDA registered Direct Broker in insurance products and a wholly owned subsidiary company generated a total premium collection amounting to Rs 61 crore in Q1FY22 as against Rs 44 crore in the previous year. It generated a Profit after Tax of Rs 4.31 crore in Q1FY22 as against Rs 4.16 crore in the previous year.

The Sri Lankan subsidiary- Asia Asset Finance PLC(AAF) where Muthoot Finance holds 72.92% stake, increased its loan portfolio to LKR 1429 crore as against LKR 1348 crore last year, a yoy increase of 6%. During Q1FY22, loan portfolio increased by LKR 29 crore. Total revenue for Q1FY22 stood at LKR 68 crore as against previous year total revenue of LKR 70 crore. It generated a Profit after Tax of LKR.0.97 crore in Q1FY22 as against as against previous year loss of LKR 1.69 crore, a yoy increase of 157%.

Muthoot Money (MML), became a wholly owned subsidiary of Muthoot Finance in October 2018. MML is a RBI registered Non- Banking Finance Company engaged mainly in extending loans for Cars, Two wheelers, Commercial Vehicles and Equipments. Recently, As on June 30,2021, its loan portfolio stood at Rs 333 crore, as against last year of Rs 497 crore. Total revenue for Q1FY22 stood at Rs 11 crore. It incurred a loss of Rs 0.11 crore in Q1 FY 22 as against previous year loss of 2.47 crore. Its Stage III Asset on Gross Loan Asset % end June 2021 stood at 18.85% and net of Stage 3 ECL provisions stood at 14.28%.

Financial Performance FY2021:

For the year ended March 2021 (FY2021), Muthoot Finance reported 19% rise in Income from operations at Rs 11530.79 crore. Other income surged 53% to Rs 35.63 crore in FY2021. The total income improved 19% to Rs 11566.42 crore. Interest expense increased 29% to Rs 4099.93 crore, while other expenses declined 1% to Rs 2012.43 crore. Ensuing Gross profit rose 21% to Rs 5454.06 crore. Depreciation increased 14% to Rs 67.36 crore, while provision and write offs moved up 36% to Rs 255.22 crore. PBT jumped 20% to Rs 5131.48 crore. Effective tax rate stood at 25.6% compared to 25.6%. The minority interest declined 52% to Rs 14.47 crore. The final bottomline of the company inched up 21% to Rs 3804.40 crore in FY2021.

Muthoot Finance: Consolidated Results

Particulars

2106 (3)

2006 (3)

Var %

2103 (12)

2003 (12)

Var %

Income from operations

2955.83

2604.48

13

11530.79

9683.98

19

Other Income

7.59

2.34

224

35.63

23.29

53

Total Income

2963.42

2606.82

14

11566.42

9707.27

19

Interest Expenses

1085.55

972.06

12

4099.93

3172.84

29

Other expenses

471.02

426.17

11

2012.43

2027.71

-1

Gross profit

1406.85

1208.59

16

5454.06

4506.72

21

Depreciation

15.20

14.02

8

67.36

59.24

14

Profit before tax and Provisions

1391.65

1194.57

16

5386.70

4447.48

21

Provisions and write off

81.80

43.08

90

255.22

187.08

36

Profit before tax 

1309.85

1151.48

14

5131.48

4260.40

20

Provision for tax

331.27

293.80

13

1312.61

1091.71

20

PAT

978.59

857.67

14

3818.87

3168.69

21

Minority Interest

0.71

4.17

-83

14.47

30.44

-52

PAT after MI

977.88

853.51

15

3804.40

3138.25

21

EPS*(Rs)

97.5

85.1

 

94.8

78.2

 

* Annualized on current equity of Rs  401.20 crore. Face Value: Rs 10, Figures in Rs Crore

Source: Capitaline Corporate Database



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