Muthoot Finance Q1 Review - Robust Gold Loan Growth Maintained; Margins Declined: IDBI Capital

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IDBI Capital Report

Muthoot Finance Ltd. reported strong growth in gold assets under management at 29% YoY versus 27% YoY (FY21).

Overall consolidated AUM grew by 25% YoY; management guided for 15% plus growth on conservative basis in FY22.

Profitability growth was lower at 15% due to higher provisions.

Net interest income grew by 18% YoY led by decline in margins; while pre provision operating profit grew by 17% YoY led by lower other income.

Provisions increased by 131% YoY due to asset quality deterioration.

Stage III loan assets increased to 1.2% versus 0.9% QoQ, while Muthoot Finance carries excess provision of Rs 2.95 billion in balance sheet.

On non gold portfolio front, restructuring stood at Rs 17.3 billion, however, stage III in vehicle finance and micro finance institution business stands at 18.9% and 3.7% respectively.

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