Muthoot Finance Q4 profit falls 4% to ₹960 cr; gold loan assets up 11%

India’s largest gold financing company Muthoot Finance Ltd has reported a 4% fall in Jan-March profit at ₹960 crore as compared to ₹996 crore profit reported during the corresponding period last year, primarily due to economic challenges posed by geopolitical crisis and Covid-19 pandemic. The company’s income also dipped 5% to ₹2,678.37 crore in the said quarter as compared to ₹2,823.85 crore during the same period last year.

Muthoot Finance's standalone profit for the full fiscal year also rose 6% year-on-year to ₹3,954 crore against ₹3,722 crores during FY21, the company says in its stock exchange filing. The company's loan assets stood at ₹58,053 crore compared to ₹52,622 crore last year, a growth of 10% YoY, while gold loan assets grew 11% to ₹57,531 crore YoY.

The earnings per share for the quarter stood at ₹98.55 as compared to ₹92.79 for FY21. With total branches rising to 4,617, Muthoot Finance's consolidated loan assets under management grew 11% YoY to ₹64,494 crore in FY22 against ₹58,280 crore last year.

However, the company's consolidated profit for FY22 grew 6% YoY to Rs 4,031 crore against Rs 3,819 crore last year.

Chairman George Jacob Muthoot says Muthoot Finance has delivered a consistent performance. He says gold prices have been steadily rising over the last three years and this has attracted new customers to the product and has positively helped the sector.

"With Indian households owning the world’s biggest private stock of gold, and only 10% in the organised gold loan market space including gold loan companies, there is a huge untapped opportunity in the gold loan sector. We aim to keep innovating and maintain our leadership in the gold loan sector,” says Muthoot.

George Alexander Muthoot, MD, Muthoot Finance says the company is expecting borrowing costs to go up gradually during the year.

"Gold loans are a great option both, in times of rise and drop in economic activities. As the economy recovers and overall economic demand revives, our focus will be to make the most of the opportunities and keep innovating further," he says, adding that gold loan AUM are expected to be 12-15% in FY23.

As per the company, it disbursed fresh loans to 4 lakh new customers amounting to ₹4,664 crore and to 4.89 lakh inactive customers amounting to ₹4759 crores.

The FY22 profit of its subsidiaries Muthoot Homefin, Belstar Microfinance, Muthoot Insurance Brokers, Asia Asset Finance, and Muthoot Money stood at ₹8 crore, ₹45 crore, ₹45 crore, LKR 12 crore, and ₹45 crore, respectively.

Ahead of the financial result announcement, Muthoot Finance Ltd shares closed 1.28% or 14.35 points up at ₹1,137.30 on the National Stock Exchange (NSE). In the past one month, the stock has fallen 9.19% in the wake of a global sell-off. The stock has been on a downward trend, falling 26.18% in the year-to-date period, while 8.53% in the past year. As per the latest share price, Muthoot Finance's m-cap stands at ₹45,645 crore.