Q1 2027 Muthoot Finance Ltd Earnings Call Transcript
Key Points
- Consolidated loan AUM expanded by 43% YoY to INR191,000 crores, with consolidated PAT growing 43% YoY to INR2,825 crores.
- Standalone gold loan AUM grew 44% YoY to INR163,000 crores, supported by strong customer acquisition of 482,000 new customers and a 40% increase in branch productivity.
- Asset quality remains stellar with credit losses at just 0.05% of gross loans, and the company maintains a strong capital adequacy ratio of 20.3%.
- Subsidiaries are performing well: Muthoot Money saw PAT surge 366% YoY, Belstar returned to profitability, and Asia Asset Finance posted a 113% YoY PAT increase.
- Management expects yields to stabilize at 18-18.5%, which they consider a healthy level, and remains confident in achieving 15% AUM growth guidance for FY27.
- Gold loan yields dropped sharply by ~300 bps QoQ to 17.93%, driven by lower interest rates, reduced recoveries, and a shift to lower-yielding schemes.
- The company acknowledged that last year's high yields were a one-time windfall, and extraordinary recoveries are unlikely to repeat, impacting future profitability.
- Competition from banks and NBFCs is intensifying, potentially leading to further yield compression and requiring aggressive pricing strategies.
- The new regulatory LTV norms (75-85%) have increased Stage 1 and Stage 2 loans, and the transition to new products has caused some operational disruption.
- Management refrained from providing a clear profit growth outlook, indicating that FY27 profit growth may be limited to single digits, which could disappoint investors.
Ladies and gentlemen, good day, and welcome to the Muthoot Finance Q1 FY27 earnings conference call. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Sanket Chheda from DAM Capital. Thank you, and over to you, sir.
Yes. A very good afternoon to all of you. We are here to discuss Muthoot Finance Q1 results. For that, we have the entire management team with us, starting with Mr. George Alexander Muthoot, who is the Managing Director; and then we have four Whole-time Directors, Mr. Eapen Alexander, who is an Executive Director; Mr. K.R. Bijimon, who is an Executive Director; and Mr. Oommen Mammen who is CFO.
Without further ado, I'll hand the call over to the Managing Director, Mr. George Alexander Muthoot, for his opening remarks. We'll follow that up with question and answers. Over to you, sir.
Thank you,
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