GNPA increased by 74 bps YoY, from 2.2G% in O3FY24 to 3.03% in O3FY25.
Sadaf Sayeed, CEO, Muthoot Microfin
FinTech BizNews Service
Mumbai, February 6, 2025: Muthoot Microfin Limited (NSE: MUTHOOTMF, BSE: 544055), among India’s leading Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI), focused on providing micro-loans to women entrepreneurs with a focus on rural regions of India, today announced its un-audited financial performance for the third quarter and nine months of the financial year 2024-25.
Business Highlights: Ǫ3FY25
· GLP grew by 8.3% YoY from Rs.11,458 crore to Rs. 12,405 crore; company disbursed Rs. 2,035 crore during the quarter
· Borrower base grew by 4.5% YoY from 33 lakhs to 34 lakhs across 1,651 branches. The branch count grew by 15.G% YoY as the company added 58 new branches in Ǫ3
· Reduced lending rates by 25 bps for income-generating loans (IGL) and by 125 bps for third-party product loans (TPP) in Ǫ3FY25; bringing the total reduction in IGL to 115 bps since January 2024
Financial Highlights: Ǫ3FY25
· Total income increased by 17.7% YoY from Rs. 579 crore to Rs. 681 crore
· Net interest income (NII) increased by 23.1% YoY from Rs. 341 crore to Rs. 420 crore
· Pre-provision operating profit (PPOP) increased by 3G.6% YoY from Rs. 181 crore to Rs. 252 crore
· Profit After Tax (PAT) for the quarter declined from Rs. 125 crore to Rs. 4 crore. This was primarily driven by considerable provisioning cost in Ǫ3 of Rs. 247 crore, influenced by the uncertain macroeconomic environment and recent regulatory changes.
· The GNPA of the Company is at 3.03% as against GNPA of 2.29% a year ago, NNPA (Net of Stage III provision)* stood at 1.27% as against 0.87% last year
· Robust liquidity of Rs. 788 crore of unencumbered cash and cash equivalents, alongside unutilized sanctions totalling Rs. 715 crores and pending DA/PTC sanctions of 1,267 crore
· Healthy capital position with a CRAR of 30.5%
· 25% of our collections are via digital channels such as UPI/Customer App, while 100% disbursements are entirely executed digitally
Key Metrics: Ǫ3FY25
Particulars | Q3 FY24# | Q3 FY25 | YoY% |
Gross Loan Portfolio (Rs. Cr) | 11,458.1 | 12,404.G | 8.3% |
Borrowers (Lakh) | 33 | 34 | 4.5% |
Branches (No.) | 1,424 | 1,651 | 15.G% |
Particulars (Rs. Cr) | Q3 FY24# | Q3 FY25 | YoY% |
Net Interest Income (NII) | 341.3 | 420.2 | 23.1% |
Pre-Provision Operating Profit (PPOP) | 180.7 | 252.2 | 3G.6% |
Profit After Tax (PAT) | 124.6 | 3.8 | -G6.G% |
Key Ratios | Q3 FY24# | Q3 FY25 | YoY% |
Net Interest Margin (NIM) | 12.48% | 13.26% | 78 bps |
Cost/Income Ratio | 48.66% | 43.20% | -546 bps |
Opex/GLP Ratio | 5.G5% | 6.13% | 18 bps |
Gross NPA | 2.2G% | 3.03% | 74 bps |
Net NPA* (Net of Stage 3 Provision) | 0.87% | 1.27% | 40 bps |
Return on Assets (ROA) | 4.47% | 0.12% | -435 bps |
Return on equity (ROE) | 25.G7% | 0.50% | -2,547 bps |
Key Metrics: GMFY25
Particulars (Rs. Cr) | 9M FY24# | 9M FY25 | YoY% |
Net Interest Income (NII) | G57.5 | 1230.1 | 28.5% |
Pre-Provision Operating Profit (PPOP) | 515.1 | 737.3 | 43.2% |
Profit After Tax (PAT) | 32G.8 | 178.6 | -45.8% |
Key Ratios | 9M FY24# | 9M FY25 | YoY% |
Net Interest Margin (NIM) | 12.63% | 13.07% | 44 bps |
Cost/Income Ratio | 47.16% | 43.27% | -38G bps |
Opex/GLP Ratio | 5.G4% | 6.08% | 14 bps |
Return on Assets (ROA) | 4.25% | 1.G3% | -232 bps |
Return on equity (ROE) | 24.33% | 8.20% | -1,613 bps |
Commenting on the performance:
Mr. Thomas Muthoot, Chairman G Non-Executive Director of Muthoot Microfin, said-
The first nine months of FY25 presented challenges due to various macroeconomic and industry-related factors that affected the Indian financial sector. Despite this environment, we remained committed to managing our portfolio with utmost caution, striking a balance between operational efficiency and strong asset quality.
Our Assets Under Management remained ffat ǪoǪ at Rs. 12,405 crore, declining marginally by 0.S% ǪoǪ driven by calibrated disbursements. GNPA for this period stood at 3.03%, a marginal uptick (+33bps ǪoǪ) despite the elevated industry stress. Our disciplined underwriting policies supported by a data-driven scorecard and a robust collection team, have enabled us to minimize the impact of industry challenges. We would continue to maintain a balanced approach to business, with focus on asset quality, and improving profitability.
On the leadership front, we are delighted to welcome Mr. Thomas Muthoot John, a member of the fourth generation of the Muthoot Pappachan Group (MPG), to the Board of Muthoot Microfin as an Executive Director. His fresh perspective, innovative ideas, and dynamic energy will play a pivotal role in driving the next phase of growth, innovation, and expansion. Together, we are committed to strengthening MPG’s legacy and further solidifying our position as a leader in the microfinance industry.”
Mr. Sadaf Sayeed, CEO, Muthoot Microfin, said-
“The microfinance industry is experiencing a challenging financial year, shaped by macroeconomic uncertainties and a shifting regulatory landscape. Despite these obstacles, the sector has demonstrated remarkable resilience and adaptability. At Muthoot, we remain committed to driving steady and responsible growth, underpinned by strong corporate governance, operational agility, and a resilient business model.
Owing to these challenges, we continued loan disbursements in a calibrated manner while maintaining a cautious eye on the market during Ǫ3 FY25. The Company reported Net Interest Income of Rs. 420.2 Crore for Ǫ3FY25 a growth of 5.5% ǪoǪ with NIMs remaining stable at 13.2C%. However, our profitability for the quarter was affected by our proactive decision to maintain high provisions, addressing growing overleverage concerns within the industry. Notably, portfolio share of MMFL+4 borrowers have declined to 7.1% from 10.S% in Ǫ2FY25 reffecting our stringent efforts to maintain portfolio quality. With collections remaining a priority, we have observed a positive trend in December and January, underscoring the effectiveness of our recovery efforts.
Macro and regulatory challenges related to overleveraging persist. However, with the new guardrails coming into effect from April 2025, we are well-prepared with robust systems and processes already in place. As an organization, we have proactively adhered to these guidelines ahead of time. Moving forward, we remain committed to strengthening our internal ecosystem, ensuring resilience even in challenging times. We have begun to see signs of recovery and remain optimistic that our strong fundamentals will enable us to achieve the desired growth and profitability.”
