April 13, 2024

Muthoot Finance Q3FY23 Financial Results

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New Delhi, February 15, 2023:A meeting of the Board of Directors of Muthoot Finance Ltd. was held today to consider and approve the unaudited standalone and consolidated results for the quarter ended December 31, 2022.

Consolidated Results of Muthoot Finance Ltd

Muthoot Finance Ltd Consolidated Loan Assets Under Management grew 7% YoY to Rs.65,085 crores in Q3FY23 as against Rs.60,896 crores in same quarter last year. During the quarter, Consolidated Loan Assets Under Management increased by 1%. Consolidated Profit after tax increased by 4% QoQ to Rs.934 crores as against Rs.902 crores in the last quarter.

 

(Rs. in crores)

Financial Performance Q3 FY23 Q2 FY23 QoQ% Q3 FY22 YoY % 9M FY23 9M FY22 YoY%
Group Branch Network (Nos.) 5,810 5,750 1% 5,490 6% 5,810 5,490 6%
Consolidated Gross Loan Assets Under Management of the Group 65,085 64,356 1% 60,896 7% 65,085 60,896 7%
Consolidated Profit of the Group 934 902 4% 1,044 -11% 2,661 3,025 -12%
Contribution in the Consolidated Gross Loan Assets Under Management of the Group
Muthoot Finance Ltd 57,571 57,130 1% 54,667 5% 57,571 54,667 5%
Subsidiaries 7,514 7,226 4% 6,229 21% 7,514 6,229 21%
Contribution in the Consolidated Profit of the Group
Muthoot Finance Ltd 900 865 4% 1,028 -12% 2,567 2,989 -14%
Subsidiaries 34 37 -8% 15 127% 94 36 161%

Commenting on the results, Mr. George Jacob Muthoot, Chairman Muthoot Group said, “We have reported a steady performance during the quarter. Our consolidated loan assets stand at Rs.65,085 crores, and has registered a growth of 7% YoY. Consolidated Profit after Tax has grown 4% and stands at Rs.934 crores for Q3FY23.  The contribution of our subsidiaries to the overall consolidated AUM improved slightly to 12%, and going ahead we expect the share of non-gold AUM to gradually rise. It is to be noted that despite the challenges, efforts by NBFC sector has increased the visibility of the gold loans as a safe, secured lending product. We are hopeful that our expertise in the product would help us capitalise on this positively in the coming quarters”.

Mr. George Alexander Muthoot, Managing Director said, Muthoot Finance registered a YoY growth of 6% in loan assets and marginal QoQ growth in gold loans of less than 1%. Yield on loan portfolio witnessed a QoQ increase of  0.84% consequent to stoppage of very low rate teaser loans. Borrowing cost slightly rose to 8.13% due to the impact of general increase in the interest rates with banks MCLR being constantly revised and fresh NCDs being raised at higher rates. Our continued focus on loan disbursements, recovery efforts and keeping our borrowing costs under check could enable us to maintain our NIMs in the range of 11-12%. Return on assets for the quarter improved to 6.27%.” 

Standalone Results of Muthoot Finance Ltd and its subsidiaries

 Muthoot Finance Ltd (MFIN), India’s largest gold financing company in terms of loan portfolio, registered net profit of Rs. 902 crores in Q3FY23 as against Rs.867 crores in Q2FY23, increase of 4% QoQ. Loan Assets stood at Rs. 57,731 crores as compared to Rs.54,688 crores in the same quarter last year, registering a growth of 6% YoY. Loan Assets grew by 1% QoQ.

Muthoot Homefin (India) Ltd (MHIL), the wholly owned subsidiary, Gross Loan AUM stood at Rs.1,410 crores as against Rs.1,579 crores in same quarter last year. Total revenue for Q3 FY23 & 9M FY23  stood at Rs.41 crores & Rs.116 crores as against Rs.60 crores & Rs.152 crores in Q3 FY22 & 9M FY22. Profit after tax increased to Rs.4 crores & Rs.8 crores in Q3 FY23 & 9M FY23  as against Rs.2 crores & Rs.3 crores in Q3 FY22 & 9M FY22. Stage III Asset as percentage of Net Loan Asset stood at 4.36% as on December 31, 2022 as compared to 4.33% as of September 30, 2022.

M/s. Belstar Microfinance Limited (BML),  an RBI registered micro finance NBFC and a subsidiary company where Muthoot Finance holds 56.97% stake, grew its Gross Loan AUM to Rs. 5,341 crores as against last year of     Rs. 3,836 crores, registering a YoY growth of 39%. During Q3FY23, its Gross Loan AUM increased by Rs. 203 crores. It generated a Profit after tax of Rs. 14 crores and Rs. 49 crores in Q3FY23 and 9M FY23 as against previous year profit after tax of Rs. 12 crores and Rs. 16 crores. Stage III Asset as percentage of Net Loan Asset decreased to 7.40% as of December 31, 2022 as compared to 8.52% as of September 30, 2022.

Muthoot Insurance Brokers Pvt Limited (MIBPL), an IRDA registered Direct Broker in insurance products and a wholly owned subsidiary company generated a total premium collection amounting to Rs. 165 crores in Q3FY23 and Rs. 447 crores in 9MFY23  as against Rs. 134 crores and Rs. 293 crores  in the previous year.  It generated a Profit after tax of at Rs. 15 crores and Rs. 31 crores in Q3FY23 and 9M FY23 as against previous year profit after tax  of Rs. 8 crores and Rs. 17 crores.

Asia Asset Finance PLC (AAF) is a subsidiary based in Sri Lanka where Muthoot Finance holds 72.92% stake. Loan portfolio grew to LKR 2,078 crores as against LKR 1,577 crores last year, an increase of 32% YoY. Total revenue for Q3FY23 and 9MFY23 stood at LKR 160 crores and LKR 424 crores as against previous year total revenue of LKR 83 crores and LKR 226 crores. It generated a Profit after tax of at         LKR 8 crores and LKR 23 crores in Q3FY23 and 9M FY23 as against previous year profit after tax of LKR 4 crores and LKR 7 crores.

Muthoot Money Ltd (MML), became a wholly owned subsidiary of Muthoot Finance Ltd in October 2018. MML is a RBI registered Non-Banking Finance Company engaged mainly in extending loans for commercial vehicles and equipment. Loan portfolio for Q3FY23 increased to Rs.293 crores as against Rs.236 crores in same quarter last year. Total revenue for Q3 FY23 & 9M FY23 stood at Rs.16 crores and Rs.39 crores as against Rs.10 crores and Rs.34 crores in Q3 FY22 & 9M FY22.

 Other Highlights:

Financial Highlights (MFIN): Standalone results for Muthoot Finance Ltd.

(Rs. in Crores)

 Particulars Q3 FY23 Q2 FY23 QoQ% Q3 FY22 YoY % 9M FY23 9M FY22 YoY%
Total Income 2,667 2,504 7% 2,872 -7% 7,680 8,420 -9%
Profit Before Tax 1,207 1,161 4% 1,378 -12% 3,450 4,018 -14%
Profit After Tax 902 867 4% 1,029 -12% 2,571 2,994 -14%
Earnings Per  Share (Basic) Rs. 22.46 21.61 4% 25.64 -12% 64.05 74.62 -14%
Loan Assets 57,731 57,230 1% 54,688 6% 57,731 54,688 6%
Branches 4,672 4,641 1% 4,617 1% 4,672 4,617 1%

 

Particulars Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22 9M FY23 9M FY22
Return on Average Loan assets  6.27% 6.09% 5.59% 7.49%  5.97% 7.42%
Return on Average Equity 18.32% 18.47% 17.50% 24.36%  17.81% 24.45%
Book Value Per Share (Rs.) 501.59 478.96 456.48 433.74 501.59 433.74

 

Particulars Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22
Capital Adequacy Ratio  33.29 31.96 30.62 29.94
Share Capital & Reserves (Rs. in Cr) 20139 19,230 18,325 17,412

 

Business Highlights (MFIN):

Particular 9M FY23 9M FY22 Growth (YoY)
Branch Network 4,672 4,617 1.19%
Gold Loan Outstanding (Rs. in Cr) 56,824 54,215 5%
Credit Losses (Rs. in Cr) 13 23 -43%
% of Credit Losses on Gross Loan Assets Under Management 0.02% 0.04% -50%
Average Gold Loan per Branch (Rs. In Cr) 12.16 11.74 4%
No. of Loan Accounts (in lakh) 81 85 -5%
Total Weight of Gold Jewellery pledged (in tonnes) 175 178 -1.69%
Average Loan Ticket Size 70,104 63,661 10%
No. of employees 26,399 26,599 -1%

 

Our Subsidiaries:

 About Muthoot Insurance Brokers Pvt Limited:

MIBPL is a wholly owned subsidiary of Muthoot Finance Ltd. It is an unlisted private limited company holding a license to act as a Direct Broker from IRDA since 2013. It is actively distributing both life and non-life insurance products of various insurance companies. During Q3FY23, it has insured more than 9,32,000 lives with a first year premium collection of Rs. 130 crores under traditional, term and health products. The same was 12,78,000 lives with a first year premium collection of Rs. 99 crores in Q3FY22.

 

Key Business Parameters

(Rs. in Crores)

Particulars 9M FY 23 9M FY 22 Q3 FY 23 Q2 FY 23 Q1 FY 23 FY 22
Total Premium Collection   447      293 165 152 131 479
No. of Policies (in lakhs)          34        25 9 12 12 36
Total Revenue 47 29 22 14 11 45
Profit After Tax 31 17 15 9 7 28

 

About Muthoot Homefin (India) Limited:

MHIL is a Housing Finance Company registered with The National Housing Bank (NHB). It is a wholly owned subsidiary of Muthoot Finance Limited.

 

MHIL’s prime goal is to contribute towards financial inclusion of LMI families by opening doors of formal housing finance to them. Its focus is on extending Affordable Housing Finance. MHIL would be concentrating primarily on retail housing loans in the initial stages. It operates on a ‘Hub and Spoke’ model, with the centralized processing based out of corporate office at Mumbai. MHIL has operations in 14 states and 2 Union territories – Maharashtra (including Mumbai), Gujarat, Rajasthan, Madhya Pradesh, Kerala, Karnataka, Telangana, Andhra Pradesh, Haryana, Chandigarh, Uttar Pradesh, Chattisgarh, Punjab, Tamil Nadu, Delhi and Pondicherry.

MHIL has short term debt rating of ‘A1+’ for its Commercial Paper programme which indicates, “Very strong degree of safety regarding timely payment of financial obligations and carry lowest credit risk” from ICRA Ltd and Care Ratings Ltd.

 

MHIL has long term debt rating of CRISIL AA+(stable) for its Bank Limits and Non-Convertible Debentures and CARE AA+(Stable) for its Non-Convertible Debentures which indicates “High degree of safety with regard to timely servicing of financial obligations and carries very low credit risk”.

Key Financial Parameters                                                                                                                   (Rs. in Crores)

Particulars 9M FY 2023 9M FY 2022 Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 FY 2022
No. of Branches 108 108 108 108 108 108
No. of Sales Offices 108 108 108 108 108 108
No. of Employees 318 259 318 313 222 243
             
Gross Loan AUM 1,410 1,579 1,410 1,420 1,475 1,470
Net Loan Assets 1,042 1,228 1,042 1,037 1,078 1,054
Capital Adequacy Ratio 63 58 63 60 58 60
             
Total Revenue 116 152 41 37 38 214
Total Expense 105 148 35 34 36 204
Profit Before Tax 11 4 5 3 2 10
Profit After Tax 8 3 4 2 2 8
             
Shareholders Funds 455 442 455 451 449 447
Total Outside Liabilities 733 989 733 748 850 836
Total Assets 1,188 1,430 1,188 1,199 1,299 1,283
             
Stage III Loan Assets 45 70 45 45 38 31
% Stage III Assets on Net Loan Asset 4.36% 5.69% 4.36% 4.33% 3.52% 2.93%
Stage III ECL Provision 28 29 28 30 23 18
ECL provision 35 33 35 37 31 26
ECL Provision as a % of Net Loan asset 3.32% 2.72% 3.32% 3.58% 2.86% 2.44%
Number of Customers 20,957 21,467 20,957 21,027 20,798 21,035

 

About Belstar Microfinance Limited (BML):

BML was incorporated in January 1988 at Bangalore and the company was registered with the RBI in March 2001 as a Non Banking Finance Company. The company was reclassified as “NBFC-MFI” by RBI effective from 11th December 2013. Muthoot Finance holds 56.97% of equity share capital in BML. BML was acquired by the ‘Hand in Hand’ group in September 2008 to provide scalable microfinance services to entrepreneurs nurtured by ‘Hand in Hand’ Self Help Group (SHG) program. The company commenced its first lending operations at Haveri District of Karnataka in March 2009 to 3 SHGs, 22 members for INR 0.2million.

In the last thirteen years of its operations, BML primarily relied on taking over the existing groups formed by ‘Hand in Hand’ India. BML predominantly follows the SHG model of lending. Effective January 2015, BML started working in JLG model of lending in Pune district, Maharashtra.

As of December 31, 2022, BML operations are spread over 18 states and 1 UT (Tamil Nadu, Karnataka, Madhya Pradesh, Maharashtra, Kerala, Odisha, Chattisgarh, Gujarat, Rajasthan, Bihar, Uttar Pradesh, Haryana, Punjab, Jharkhand, Uttarakhand, West Bengal, Tripura, Delhi and Pondicherry). It has 821 branches, with 132 controlling regional offices and employs 7649 staff. Gross loan AUM has grown to          Rs. 5,341 crores as at December 31, 2022 as against Rs.3,836 crores same quarter last year. Net Profit after tax for Q3FY23 increased to Rs.14 crores as against Rs.12 crores in Q3FY22 and Net worth stood at Rs. 1,011 crores as of Q3FY23.

 

Particulars 9M FY23 9M FY22 Q3 FY23 Q2 FY23 Q1 FY23 FY 22
No. of branches 821 675 821 799 755 729
No. of Employees 7,649 5,454 7,649 7,065 6,596 5.939
             
Gross Loan AUM 5,341 3,836 5,341 5,138 4,696 4,366
Net Loan Assets 4,454 3,567 4,454 4,171 3,955 3,712
Capital Adequacy Ratio 23 18 23 24 25 24
`            
Total Revenue 707 487 252 245 210 728
Total Expense 645 468 235 218 193 672
Profit Before Tax 62 19 17 27 17 56
Profit After Tax 49 16 14 21 14 45
             
Shareholders’ Funds 1,011 55 1,011 997 978 856
Total Outside Liabilities 4,197 3,391 4,197 3,729 3,659 3,704
Total Assets 5,208 3,946 5,208 4,726 4,637 4,560
             
Stage III Loan Assets 330 213 330 355 339 215
% Stage III asset on Net Loan Assets 7.40% 5.96% 7.40% 8.52% 8.57% 5.79%
Stage III ECL Provision 244 117 244 255 229 162
ECL Provision 258 176 258 270 255 224
ECL Provision as a % of Net Loan Assets 5.80% 4.93% 5.80% 6.47% 6.45% 6.03%

 

About Asia Asset Finance PLC, Sri Lanka:

Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance Ltd on December 31, 2014.  The company formerly known as Finance and Land Sales has been in operation for over 52 years, evolving to serve the growing needs of people of Sri Lanka.

 

As on December 31, 2022, total holding in AAF by Muthoot Finance stood at 9.06 crores equity shares representing 72.92% of their total capital and 3.97 crores preference shares representing 95.87% of their capital. AAF is a registered financial company based in Sri Lanka, a fully licensed deposit-taking institution registered with the Central Bank of Sri Lanka and listed on the Colombo Stock Exchange.

 

AAF is in lending business since 1970.  At present the company is involved in Retail Finance, Hire Purchase & Business Loans and has 70 branches across Sri Lanka. It has total staff strength of 454 currently. In 2015, it entered the Gold Loan sector with assistance of Muthoot Finance.

 

Key Financial Parameters        

 (LKR in crores)

Particulars 9M FY23 9M FY22 Q3 FY23 Q2 FY23 Q1 FY23 FY22
LKR/INR 0.225911 0.366583 0.225911 0.224767 0.218977 0.257069
             
No. of Branches 70 55 70 63 63 59
No. of Employees 454 394 454 413 400 526
             
Gross Loan AUM 2,078 1,577 2,078 1,930 1,762 1,735
             
Capital Adequacy Ratio 25% 20% 25% 25% 30% 28%
             
Total Revenue 424 226 160 148 116 318
Total Expenses 392 212 149 135 108 298
Profit Before Tax 32 14 11 13 8 20
Profit After Tax 23 7 8 10 5 12
             
Shareholders Funds 296 271 296 288 278 276
Total Outside Liabilities 2,062 1,501 2,062 1,932 1,757 1,659
Total Assets 2,358 1,772 2,358 2,220 2,035 1,934

 

About Muthoot Money Limited:

 

Muthoot Money Ltd (MML), became a wholly owned subsidiary of Muthoot Finance Ltd in October 2018. MML is a RBI registered Non Banking Finance Company engaged mainly in extending loans for Cars, Two Wheelers, Commercial Vehicles and Equipment. The operations are now centered in Hyderabad. CRISIL Ltd assigned long term debt rating of AA/Stable for its bank limits. As on December 31, 2022 Muthoot Money Ltd. has a total loan portfolio of Rs.293 crores.

 

Key Financial Parameters:                                                                                                    (Rs. in crores)

Particulars 9M FY 2023 9M FY 2022 Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 FY 2022
No. of branches 139 35 139 139 124 66
No. of employees 818 192 818 712 553 365
             
Gross Loan AUM 293 236 293 234 197 207
Capital Adequacy Ratio 31% 43% 31% 40% 47% 46%
             
Total Revenue 39 34 16 12 11 45
Total Expense 43 45 20 12 11 54
Profit Before Tax -4 -11 -4 0.28 0.03 -9
Profit After Tax -3 -8 -3 0.19 0.05 -7
             
Stage III Loan Assets 22 29 22 13 16 14
% Stage III Assets on Gross Loan Asset 7.50% 12.42% 7.50% 5.63% 7.87% 6.62%
Stage III ECL Provision 10 12 10 6 7 5
ECL provision 12 15 12 7 8 6
ECL Provision as a % of Gross Loan asset 3.96% 6.34% 3.96% 3.12% 3.98% 2.93%
             
Shareholders Funds 101 102 101 104 104 104
Total Outside Liabilities 230 146 230 172 120 123
Total Assets 331 248 331 276 224 227