Muthoot Microfin delivered exceptional financial performance in Q1, with net profit surging over 13-fold to ₹81.3 crore compared to ₹6.2 crore in the same period last year. According to the latest NSE filing, this remarkable growth was driven by robust operational metrics and improved asset quality management, with the company reporting its highest-ever first-quarter disbursement during the quarter.
The microfinance company demonstrated strong business momentum with gross loan portfolio expanding 18% year-on-year and 3.2% sequentially to ₹14,457 crore, reflecting growth in its lending business. As reported by the company, disbursements stood at ₹2,645 crore during the quarter, up 48.9% from the year-ago period, marking the highest-ever first-quarter disbursement. The company also commenced gold loan disbursements during the quarter under a referral and co-lending partnership with Muthoot Fincorp, generating ₹192.86 crore during the quarter.
The company continued to diversify its portfolio, with the non-Joint Liability Group (Non-JLG) portfolio rising to 24%, driven by growth in the Small and Micro Enterprise Individual Loan segment. Asset quality strengthened significantly, with gross non-performing assets (GNPA) improving by 115 basis points year-on-year and 19 basis points sequentially to 3.70%, while net non-performing assets (NNPA) declined 53 basis points year-on-year to 1.05%. Credit cost stood at 2.6%, below the company's guided range of 2.7-3%, indicating better credit management practices. Collection efficiency significantly improved to 97.97% in Q1 FY27, showing a jump of 497 basis points YoY, demonstrating robust underwriting and strong recovery discipline.
The company's standalone net profit grew 30.6% year-on-year to ₹8.1 crore compared with ₹6.2 crore in the corresponding period last year. Standalone revenue for Q1 FY27 reached ₹670 crore, up from ₹560 crore in Q1 FY26, representing a 19.6% year-on-year growth. Assets Under Management (AUM) stood at ₹14,457 crore as of June 30, 2026, registering an 18% YoY growth. The company raised ₹2,733 crore during the quarter and maintained a strong liquidity position with ₹1,328 crore in liquid funds and high-quality liquid assets (HQLA)-GSec investments. The capital adequacy ratio (CRAR) improved to 24.9% at the end of June 2026 from 23.9% in March 2026.
A significant development was CRISIL upgrading the long-term credit rating of the company to CRISIL AA-/Stable from CRISIL A+/Positive, marking a critical pivot that will compress the cost of borrowing in coming quarters. Shares of Muthoot Microfin closed at ₹222.65 apiece on the NSE on Thursday, down 3.26% ahead of the earnings announcement. Chairman and Non-Executive Director Thomas Muthoot said the FY27 marks an inflection point for the microfinance sector, with improving collection trends and a more stable operating environment. The company is focusing on diversifying its loan book through growth in the Small Enterprise Loan segment and the rollout of gold loans via co-lending partnerships, positioning it well for continued growth in the microfinance sector.
