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Muthoot Microfin tumbles after weak Q4 performance

09-May-25 14:22 Hrs IST

Revenue from operations declined by 13.71% YoY to Rs 555.03 crore during the quarter.

Net Interest Income (NII) for the fourth quarter was Rs 321.05 crore, down 19.6% YoY.

Pre-provision operating profit (PPOP) declined by 45.5% to Rs 130.29 crore in Q4 FY25 from Rs 239.28 crore in Q4 FY24.

Impairment on financial instruments in the quarter ended on 31 March 2025 was Rs 652.01 crore, which is significantly higher as compared with the impairment charge of Rs 61.90 crore provided in the same period last year.

The company posted a pre-tax loss of Rs 521.72 crore in Q4 FY25 as against a pre-tax profit of Rs 177.39 crore in Q4 FY24.

For FY25, Muthoot Microfin has registered a net loss of Rs 222.52 crore as against a net profit of Rs 449.58 crore recorded in FY24. Revenue from operations added up to Rs 2561.69 crore (up 13.91% YoY).

The company's gross loan portfolio (GLP) grew by 1.3% to Rs. 12,357 crore in FY25. The company disbursed loans amounting to Rs. 8,872 crore during the year.

In FY25, the borrower base grew by 2.3% YoY to 34.3 lakhs across 1,699 branches.

The GNPA of the company is at 4.84% as against GNPA of 2.29% a year ago. The NNPA (net of stage III provision) stood at 1.34% as against 0.91% last year.

The company has maintained liquidity of Rs 697 crore of unencumbered cash and cash equivalents, alongside unutilized sanctions totalling Rs 596 crore. The capital position remained healthy, with a CRAR of 27.9%.

Thomas Muthoot, chairman & non-executive director, Muthoot Microfin, said: 'FY25 has been a challenging year for the industry, testing our resilience and reaffirming that true strength lies not in avoiding adversity, but in responding to it with discipline, empathy, and adaptability.

At Muthoot Microfin, we chose to prioritise asset quality and customer engagement over short-term profitability. While this conservative approach impacted our profitability due to elevated provisions and a deliberate management overlay of Rs 230 crore, but these were essential steps to strengthen our long-term portfolio health.

As part of this effort, we have further tightened our underwriting norms and aligned fresh disbursements with the new SRO guardrails implemented from April 1, 2025. This has led to higher rejection rates, reduced borrower over-leverage, and early signs of improving credit discipline.

With AUM reaching Rs. 12,357 crore as of March 2025, we continue to grow with discipline and caution. As we look ahead to FY26, we remain cautiously optimistic, guided by our belief that sustainable growth comes from strong fundamentals.

Muthoot Microfin is a part of Muthoot Pappachan Group (also known as Muthoot Blue) and is one of the leading listed MFIs in India. As on 31 March 2025, the company has 3.43 million active customers served through 1,699 branches spread across 20 states and 388 districts with a gross loan portfolio (GLP) of 12,356.7 crore.