Muthoot Microfin Ltd. shares opened 4% higher on Thursday, October 8, following the company's strong Q2FY27 performance announcement. According to the company's business update shared with exchanges, the microfinance arm of Muthoot Pappachan Group achieved 22% year-on-year growth in assets under management (AUM) for the September quarter, reaching ₹15,323 crore. However, the stock has since given up all gains and is currently trading with losses, fluctuating between gains and losses at ₹172.27, down 0.4% from the intraday high of ₹179.63. The stock is down 15% over the last one month, reflecting broader market volatility.
The company's disbursements demonstrated robust growth, rising 28% year-on-year to ₹2,900 crore in the September quarter and also increasing 10% compared to the June quarter. As reported by The Hindu BusinessLine, Muthoot Microfin continued its strategic portfolio diversification, with the joint liability group (JLG) and non-JLG mix improving to 69:31 as of September 30, compared to 83:17 at the end of March 2026. The company's Small and Micro Enterprise individual loan portfolio increased to ₹4,164 crore, while maintaining near-zero delinquency. During the quarter, the company also disbursed ₹453 crore of gold loans under a referral and co-lending arrangement with parent company Muthoot Fincorp, strengthening its secured lending portfolio.
On asset quality metrics, Muthoot Microfin's collection efficiency stood at 98.11%, improving by 477 basis points from the year-ago quarter. Collection efficiency excluding advances reached 99.9%, as reported by The Hindu BusinessLine. The company's digital transformation continued with digital collections increasing to 47% in Q2FY27 from 25% a year ago and 40% in Q1FY27. Cumulative downloads of its Mahila Mitra app reached 22 lakh. As of September 30, Muthoot Microfin operated 1,675 branches and served 32 lakh active customers, continuing its expansion in Telangana, Andhra Pradesh and Assam. The company noted that the financial and operating figures are provisional and unaudited and remain subject to review by statutory auditors and approval by the Audit Committee and Board.
The company's funding costs showed significant improvement, with the cost of funds declining to 9.93% during the quarter from 10.13% in Q1FY27, marking the first time it entered single-digit territory. Incremental cost of funds also improved to 9.69% from 9.80% sequentially, as reported by The Hindu BusinessLine. Muthoot Microfin raised ₹3,213 crore during Q2, taking total borrowings for the first half of FY27 to ₹5,946 crore. As of September 30, it had liquidity of ₹1,701 crore and availed sanctioned credit lines worth ₹4,328 crore. The company also reported that available liquidity and sanctioned credit lines totalled ₹6,029 crore.
