What is your quick take on the quarterly results of Muthoot Finance for Sep-21 quarter results?

Muthoot Finance, India’s largest gold finance company, reported 8.2% growth in total revenues for Sep-21 quarter at Rs.3,052 crore. The growth in the top line was triggered by the interest income on loans growing by 10% at Rs.3,003 crore in the quarter. However, net gains on fair value changes were lower by 63%, which applied brakes on the overall revenue growth.

Net profits for Sep-21 quarter were up 8.2% at Rs.1,002 crore compared to the year ago period. Compared to the Sep-20 quarter, the finance costs or interest costs were higher, but that was offset by better top line growth. Unlike the banks, the NBFCs have not been big beneficiaries of the sharp fall in repo rates in the market or the transmission rates.

The profit growth was tempered because the provisions for impairment of financial instruments were up over 300% at Rs.119 crore. That applied pressure on profit growth. Net margins for the Sep-21 quarter stood at 32.83% which was almost at par with the net profit margins in the Sep-20 yoy quarter. NPMs were marginally lower than 33.08% NPM reported in Jun-21 sequential quarter. Overall net margins were extremely stable.