Income from operations improved 26% to Rs 2606.82 crore in the quarter ended June 2020. Interest expense increased 33% to Rs 972.06 crore, while other expenses (including staff cost of Rs 279.97 crore and other expenses of Rs 146.2 crore) declined -5% to Rs 426.17 crore. Ensuing Gross profit improved 35% to Rs 1208.59 crore in Q1FY2021 over Q1FY2020.

Depreciation rose to Rs 14.02 crore in Q1FY2021 from Rs 12.31 crore in Q1FY2020, while provision and write offs jumped to Rs 43.08 crore in Q1FY2021 from Rs 16.5 crore in Q1FY2020. PBT increased 33% to Rs 1151.5 crore.

Effective tax rate dipped to 25.5% in Q1FY2021 from 34.8% in Q1FY2020. The net profit of the company increased 53% to Rs 853.53 crore in the quarter ended June 2020.

Business performance

Gross retail loan AUM of the company increased 15% yoy to Rs 41296 crore at end June 2020. Non-gold loans moved up 24% to Rs 801 crore of AUM at end June 2020.

The net Interest margin (NIM) of the company, on calculated basis, rose by 77 bps on sequential basis to 14.04% in Q1FY2021.

Gross stage 3 assets of the company increased to 2.56% at end June 2020 from 2.16% a quarter ago. ECL Provision as % of Gross Loan Assets increased to 1.34% at end June 2020 from 1.30% a quarter ago.

CRAR ratio was at comfortable level of 26.30% at end June 2020.

Branch network of the company was flat at 5330 branches end June 2020. Employee count eased to 25430 at end June 2020 from 25554 a quarter ago.

Book value of the company stood at Rs 313.9 per share at end June 2020. Adjusted book value (adjusting for net stage 3 assets) stood at Rs 301.4 per share at end June 2020.

Subsidiaries

Muthoot Finance (MFIN), the largest gold financing company in India in terms of loan portfolio, registered an increase in net profit of 59%, at Rs 841 crore for Q1FY21 as against Rs 530 crore for Q1FY20. Loan Assets stood at Rs 41296 crore compared to Rs 35816 crore previous year, yoy growth of 15%. During Q1FY21, Loan Assets decreased by Rs 315 crore on account of closure of branches during the month of April 2020 due to pan India lockdown announced by Govt Of India in the wake of Covid-19 pandemic.

Muthoot Homefin (MHIL), the wholly owned subsidiary, loan portfolio decreased to Rs 1979 crore as against previous year of Rs 1988 crore, a yoy decrease of 0.40%. During Q1FY21, loan portfolio increased by Rs 2 crore. Total revenue for Q1FY21 stood at Rs 59 crore as against Rs 62 crore in the previous year. It achieved a profit after tax of Rs 0.41 crore in Q1FY21 as against Rs 6 crore in the previous year. Its Stage III Asset on Gross Loan Asset % as on 30 June 2020 stood at 1.70%. Company also made a Covid ECL provision of Rs 13 crore additionally.

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 2575 crore as against last year of Rs 1939 crore, a yoy increase of 33%. During Q1FY21, loan portfolio decreased by Rs 56 crore. It achieved a profit after tax of Rs 15 crore in Q1FY21 as against Rs 23 crore previous year. Its Stage III Asset on Gross Loan Asset % as on 30 June 2020 stood at 1.11%. Company also made a Covid ECL provision of Rs 6.83 crore additionally.

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 44 crore in Q1FY21 as against Rs 61 crore in the previous year. It generated a Profit after Tax of Rs 4 crore in Q1FY21 as against Rs 3 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 1348 crore as against LKR 1290 crore last year, a yoy increase of 4%. During Q1FY21, loan portfolio decreased by LKR 36 crore. Total revenue for Q1FY21 stood at LKR 70 crore as against previous year total revenue of LKR 80 crore. It incurred a loss of LKR 2 crore in Q1FY21 as against previous year profit after tax of LKR 3 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. Recently, Company has started extending loans for Commercial Vehicles and Equipments. Its loan portfolio stood at Rs 497 crore as on 30 June 2020. During Q1FY21, loan portfolio decreased by Rs 12 crore. Total revenue for Q1FY21 stood at Rs 20 crore. Company also made a Covid ECL provision of Rs 12.19 crore additionally.

Financial Performance FY2020:

For the year ended March 2020 (FY2020), Muthoot Finance reported 28% rise in Income from operations at Rs 9683.98 crore. Other income jumped 252% to Rs 23.29 crore in FY2020. The total income improved 28% to Rs 9707.27 crore. Interest expense increased 25% to Rs 3172.84 crore, while other expenses moved up 20% to Rs 2027.71 crore. Ensuing Gross profit rose 33% to Rs 4506.72 crore. Depreciation moved up 15% to Rs 59.24 crore, while provision and write offs moved up 176% to Rs 187.08 crore. PBT jumped 31% to Rs 4260.40 crore. Effective tax rate stood at 25.6% compared to 35.5%. The minority interest increased 22% to Rs 30.44 crore. The final bottomline of the company inched up 51% to Rs 3138.25 crore in FY2020.