Income from operations improved 36% to Rs 2587.4 crore in the quarter ended December 2019. Interest expense increased 19% to Rs 794.59 crore, while other expenses (including staff cost of Rs 308.89 crore and other expenses of Rs 230.28 crore) moved up 42% to Rs 539.17 crore. Ensuing Gross profit improved 46% to Rs 1253.64 crore in Q3FY2020 over Q3FY2019.

Depreciation moved up to Rs 16.21 crore in Q3FY2020 from Rs 13.38 crore in Q3FY2019, while provision and write offs jumped to Rs 100.4 crore in Q3FY2020 from Rs 10.24 crore in Q3FY2019. PBT increased 36% to Rs 1137.04 crore.

Effective tax rate dipped to 25.3% in Q3FY2020 from 37.5% in Q3FY2019. The net profit of the company surged 64% to Rs 841.09 crore in the quarter ended December 2019.

Business performance

Gross retail loan AUM of the company increased 19% yoy to Rs 38498 crore at end December 2019. Non-gold loans moved up 14% to Rs 774 crore of AUM at end December 2019.

Consolidated Loan Assets under management increased at accelerated pace of 21% at Rs 43436 crore end December 2019 from Rs 35939 crore end December 2018.

The net Interest margin (NIM) of the company, on calculated basis, eased slightly by 286 bps on sequential basis to 16.42% in Q3FY2020.

Gross stage 3 assets of the company declined to 2.54% at end December 2019 from 3.43% a quarter ago. ECL Provision as % of Gross Loan Assets eased to 1.86% at end December 2019 from 1.96% a quarter ago.

CRAR ratio was at comfortable level of 26.51% at end December 2019.

Branch network of the company increased to 5268 branches end December 2019. Employee count increased to 25149 at end December 2019 from 25091 a quarter ago.

Book value of the company on consolidated basis stood at Rs 290.4 per share at end December 2019. Adjusted book value (adjusting for net stage 3 assets) stood at Rs 283.9 per share at end December 2019.

Subsidiaries

Muthoot Finance (MFIN), the largest gold financing company in India in terms of loan portfolio, registered an increase in net profit of 50% at Rs 2191 crore for 9MFY20 as against Rs 1461 crore in the previous year. Loan Assets stood at Rs 38498 crore end December 2019 as against Rs 32470 crore end December 2018, yoy growth of 19%. During the quarter, gold loan assets increased by Rs 2783 crore.

Muthoot Homefin (India) (MHIL), the wholly owned subsidiary, increased its loan portfolio to Rs 2025 crore as against previous year of Rs 1835 crore, a yoy increase of 10%. Total revenue for Q3FY20 and 9MFY20 stood at Rs 88 crore and Rs 240 crore as against previous year total revenue of Rs 57 crore and Rs 161 crore. It achieved a profit after tax of Rs 11 crore and Rs 31 crore in Q3FY20 and 9MFY20 as against previous year profit of Rs 9 crore and Rs 30 crore. Its Stage III Asset on Gross Loan Asset % end December 2019 stood at 1.87%.

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 2285 crore as against last year of Rs 1563 crore, a yoy increase of 46%. During Q3FY20, loan portfolio increased by Rs 178 crore. It achieved a profit after tax of Rs 26 crore and Rs 77 crore in Q3FY20 and 9MFY20 as against previous year profit after tax of Rs 24 crore and Rs 53 crore. Its Stage III Asset on Gross Loan Asset % end December 2019 stood at 1.13%.

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 85 crore and Rs 217 crore in Q3FY20 and 9MFY20 as against Rs 62 crore and Rs 179 crore in the previous year. It generated a Profit after Tax of Rs 5 crore and Rs 12 crore in Q3FY20 and 9MFY20 as against Rs 4 crore and Rs 10 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 1301 crore as against last year of LKR 1163 crore, a yoy increase of 12%. Total revenue for Q3FY20 and 9MFY20 stood at LKR 86 crore and LKR 252 crore as against previous year total revenue of LKR 71 crore and LKR 209 crore. It generated a profit after tax of LKR 4 crore and LKR 9 crore in Q3FY20 and 9MFY20 as against previous year profit after tax of LKR 3 crore and LKR 7 crore.

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 vehicles. The operations are now centered in Hyderabad. Recently, Company has started extending loans for Commercial Vehicles and Equipments. During Q3FY20, it has increased its loan portfolio to Rs 492 crore. During Q3FY20, loan portfolio increased by Rs 65 crore. Total revenue for Q3FY20 and 9MFY20 stood at Rs 18 crore and Rs 49 crore.

Financial Performance 9MFY2020:

For the nine months ended December 2019 (9MFY2020), Muthoot Finance reported 28% rise in Income from operations at Rs 7042.89 crore. Other income jumped 851% to Rs 23.01 crore in 9MFY2020. The total income improved 28% to Rs 7065.90 crore. Interest expense increased 24% to Rs 2292.88 crore, while other expenses moved up 22% to Rs 1445.14 crore. Ensuing Gross profit increased 34% to Rs 3327.88 crore. Depreciation rose 15% to Rs 42.01 crore, while provision and write offs jumped 423% to Rs 169.19 crore. PBT increased 29% to Rs 3116.68 crore. Effective tax rate stood at 25.5% compared to 35.6%. The minority interest increased 32% to Rs 24.03 crore. The final bottomline of the company inched up 50% to Rs 2297.09 crore in 9MFY2020.