Analyst Meet / AGM     31-May-24
Conference Call
Muthoot Finance
Aims to raise share of non-gold subsidiaries to 18-20% of AUM in 3-5 years

Muthoot Finance conducted a conference call on 30 May 2024 to discuss the financial results for the quarter ended March 2024. George Alexander Muthoot, MD of the company addressed the call:

Highlights:

The assets under management of the company has crossed Rs 89,000 crore on consolidated basis and Rs 75,000 crore on standalone basis end March 2024.

The consolidated AUM has jumped 25% yoy and the standalone AUM also moved up 20% in FY2024.

The contribution of subsidiaries to AUM has increased to 15% from 12% last year reflecting of strategic diversification efforts.

The consolidated profit after tax increased 22% to Rs 4468 crore in FY2024.

The contribution subsidiaries in profit after tax increased to 10% from 6% last year, underlining the resilience of diversified business model with a strong focus on mission to emerge as a diversified financial services group.

The company also focused on strengthening digital strategies for a transformative growth across product portfolios.

Despite the various industry challenges, the company continued to maintain leadership position leader in the gold loan industry and capitalized on the strong growth opportunities in affordable housing, micro finance, personal loans, small business loans and vehicle finance.

The robust domestic consumption growth, growing middle class segment and rising aspirations provide ample opportunities for future growth.

The company aims to raise the share of non-gold subsidiaries to 18 to 20% of AUM in next 3-5 years.

The company also expects to achieve the loan growth of 20% in FY2025 as against the guidance of 15%.

The standalone loan book has touched to Rs 75827 crore end March 2024, driven by the robust growth in gold loan of Rs 3667 crore in Q4FY2024.

Complimenting to the gold loan business, the non gold loan business offerings continue to gain traction.

Housing finance arm achieved disbursement of Rs 815 crore in FY2024 as against Rs 223 crore in FY2023.

The micro finance arm also witness upward trend in loan assets rising sharply by 62% yoy to touch a milestone of Rs 10023 crore and posting 161% surge in the profit after tax to Rs 340 crore in FY2024.

The company is confident that the impact of regulatory norm of Rs 20,000 cash disbursal limit on business and volumes to be limited.

The company has opened 225 new branches in FY2024 across regions. The company would continue to add 150-200 branches every year.

The company has started salaried personal loan and SME loans.

In the vehicle loan business, the company doesn’t see very big prospects due to crowded market.

The company expects a good growth in microfinance, home loans and personal loans segments.

The average borrowing cost is 8.45-8.5%, while an incremental cost of borrowing is around 8.8-9%. So, the overall borrowing cost will move towards 9%. The impact on return ratio is expected negligible as the company can pass on this incremental cost to the borrowers.

The average LTV on the gold loans is around 63% and the customer can take a loan of up to 75%.

The auctions stood at Rs 162 crore in Q4FY2024 and Rs 892 crore in FY2024.

The ticket size wise the share of below Rs 1 lakh stands at 35%, Rs 1 to 3 lakh at 37% and above Rs 3 lakh is 29%.

The interest accrued stands at Rs 2190 crore end March 2024 up from Rs 1853 crore end March 2023.

The overall ECL provisions stand at Rs 935 crore, of which stage 1 stands at Rs 620 crore, stage 2 at Rs 28 crore and stage 3 at Rs 288 crore.
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