Muthoot Finance's GOLDEN Quarter: Profits Soar 87% to Record Highs!

Banking/Finance

|

Updated on 13 Nov 2025, 11:14 am

Muthoot Finance Ltd. announced its September quarter results, showcasing exceptional financial performance that surpassed market estimates. The company's net profit surged by 87.4% to ₹2,345 crore, considerably higher than the CNBC-TV18 poll estimate of ₹1,929 crore. Core income, known as Net Interest Income (NII), saw a robust increase of 58.5% from the previous year, reaching ₹3,992 crore, also beating the projected ₹3,539 crore.

The company's loan portfolio expanded impressively, with Consolidated Loan Assets Under Management (AUM) growing by 42% year-on-year to ₹1.47 lakh crore, marking a new record. Crucially, its Gold Loan AUM also hit an all-time high of ₹1.24 lakh crore, up 45% from the prior year, supported by disbursements of ₹13,183 crore in the quarter.

Asset quality indicators showed positive trends, with Stage III gross loan assets decreasing to 2.25% from 2.58% in the June quarter. Similarly, ECL provisions as a percentage of gross loan assets declined to 1.21% from 1.3%. While bad debt write-offs increased to ₹776 crore, this represented a mere 0.06% of total gross loan assets.

Impact: This strong performance is highly positive for Muthoot Finance, likely boosting investor confidence and potentially leading to an increase in its stock valuation. The record AUM figures indicate strong demand and effective management in the gold loan segment.

Rating: 8/10

Difficult terms: * **Net Profit**: The profit a company makes after deducting all its expenses, including taxes. * **Net Interest Income (NII)**: The difference between the interest income a financial institution earns from its lending activities and the interest it pays out to its depositors or lenders. It's a key measure of profitability for banks and NBFCs. * **Assets Under Management (AUM)**: The total market value of all financial assets managed by an investment company, mutual fund, or financial institution on behalf of its clients. * **Stage III Gross Loan Assets**: A classification under accounting standards (like Ind AS) for loans that are considered impaired or in default, where borrowers have significant issues making payments. A lower percentage indicates better asset quality. * **ECL Provisions (Expected Credit Loss Provisions)**: Funds set aside by financial institutions to cover potential losses from loans that may go bad. A lower ratio suggests better credit risk management.