Muthoot Microfin Q2 Profit Zooms Over Threefold to Rs 110.78 Cr

Mumbai: Muthoot Microfin on Thursday reported an over threefold jump in its Q2 net profit to Rs 110.78 crore, aided by a sharp improvement in the net interest margin (NIM) and asset quality.

The lender had reported a net profit of Rs 30.52 crore in the year-ago period.

Core net interest income of the company increased to Rs 595.383 crore in the reporting quarter, from Rs 535.788 crore in the year-ago period, on the back of a 22 per cent growth in the assets under management and an expansion in the net interest margin to 12.5 per cent from 11.9 per cent in the year-ago period.

Speaking to PTI, its chief executive and managing director Sadaf Sayeed said that the NIMs will widen to 12.75-13 per cent by Q4, and the company is maintaining its AUM target of 18-20 per cent for FY27.

The company will be able to widen margins despite the interest rate hikes by concentrating on securitisation of the portfolio, he said, adding that the share of such transactions in its liabilities will increase to 30 per cent from the present 20 per cent.

The cost of raising resources from the pass-through certificates and direct investments routes is lower as compared to raising resources from bank term loans.

Disbursements increased by 27.5 per cent year-on-year to Rs 2,899.7 crore in Q2FY27, from Rs 2,273.9 crore in Q2FY26, investor presentation showed.

Sayeed said fresh disbursements were evenly split between the joint lending group-based loans and non-JLG ones.

The company has seen a sharp improvement in asset quality, with the gross non-performing asset (NPA) ratio improved to 3.38 per cent as on September 2026, from 3.70 per cent as of June 2026 and 4.61 per cent a year ago.

Sayeed said the collection efficiencies have increased further to over 99 per cent, and stressed that the company does not see any impact because of the poor monsoons on its portfolio.

The overall contribution of Karnataka and Maharashtra, the two states which have announced a drought, is under 4 per cent, he said, adding that even that is covered under calamity insurance.

The company scrip closed 3.4 per cent up at Rs 158.25 apiece on the BSE on Thursday, as against gains of 2.60 per cent on the benchmark.

(Disclaimer: Except for the headline, this article has not been edited by HDFC Sky editorial team and is auto-generated from PTI feed.)