Muthoot Microfin Ltd delivered its strongest quarterly performance in Q2 FY27, with profit after tax (PAT) surging to ₹111 crore, representing a 360% year-on-year jump from ₹31 crore in the previous year, as reported by The Economic Times. The Keralam-based microfinance lender crossed the ₹100-crore quarterly profit mark for the first time in its history. The NBFC-MFI posted record quarterly disbursements of ₹2,900 crore, up 27.5%, while its Gross loan portfolio grew 22% to ₹15,323 crore as of September 30. Total income rose 27% to ₹733 crore, demonstrating robust operational growth across all key metrics.
Asset quality continued to show significant improvement with Gross NPA declining to 3.38%, an improvement of 123 basis points year-on-year, according to The Economic Times. Credit costs held at 2.6%, remaining within the company's guided range of 2.5-3%. Net Interest Margins (NIM) improved 50 basis points quarter-on-quarter to 12.5%, while the cost-to-income ratio fell sharply to 48.1% from 53.7% in Q1. Pre-provision operating profit climbed 67.4% year-on-year to ₹249 crore, reflecting strong operational efficiency improvements across the quarter. CEO Sadaf Sayeed highlighted the focus on secured lending portfolio showing better yields with no delinquency.
A notable shift in portfolio composition saw non-JLG (Joint Liability Group) loans expand to 31% of GLP, ahead of the company's year-end target of 30%, as reported by The Hindu BusinessLine. The Small and Micro Enterprise Loan portfolio reached ₹4,164 crore with near-zero delinquency. Gold loans via a co-lending tie-up with Muthoot Fincorp added ₹453 crore in disbursements during the quarter. Digital collections reached 47% of total collections, up from 25% a year earlier, indicating successful digital transformation initiatives. The company serves 32.7 lakh active customers across 1,675 branches in 21 states.
The average cost of borrowing fell to 9.93%, entering single-digit territory for the first time, supported by a CRISIL upgrade to AA-/Stable and CareEdge Global revising its outlook to Positive, according to The Hindu BusinessLine. Capital adequacy stood at 25.5%, while the company held liquidity of ₹1,835 crore with ₹4,442 crore in unavailed credit lines. The strong quarterly performance reflects improving asset quality, a rising share of non-JLG lending, single-digit borrowing costs, and record digital collections performance across the microfinance sector.
