Muthoot Microfin Limited has reported a sharp recovery in financial performance for the third quarter of FY26, with profit after tax more than doubling sequentially to Rs 62.4 crore, supported by improving asset quality, controlled credit costs and stable portfolio growth.
The microfinance lender’s performance marks a notable turnaround after a challenging phase for the sector, which has faced pressure from rising delinquencies and regulatory tightening. The improvement was primarily driven by a decline in stress levels across the loan book, aided by tighter underwriting norms, enhanced collection efficiencies and portfolio diversification.
During the quarter, Muthoot Microfin’s assets under management crossed the Rs 13,000 crore mark, reflecting steady disbursement momentum across core microfinance operations as well as growing traction in individual lending products. The company has been gradually expanding beyond traditional group loans, a strategy aimed at reducing concentration risk and strengthening long-term portfolio resilience.
Asset quality indicators showed meaningful improvement, with both gross and net non-performing asset ratios declining sequentially, signalling stabilisation in borrower repayment behaviour. Lower slippages and improved recoveries also helped reduce provisioning requirements, supporting profitability during the quarter.
Net interest margins remained stable, backed by calibrated pricing strategies and a diversified borrowing profile. Liquidity remained comfortable, providing the lender with adequate headroom to support future growth while maintaining balance sheet strength.
Management indicated that the company remains focused on disciplined growth, prudent risk management and strengthening customer engagement at the grassroots level. With early signs of recovery visible across the microfinance sector, Muthoot Microfin expects operating conditions to improve gradually over the coming quarters.
The strong Q3 performance reinforces the lender’s recovery trajectory and positions it well to capitalise on renewed credit demand, particularly in underserved and semi-urban markets, as sectoral headwinds begin to ease.
Send news announcements/press releases to:
editor@thefoundermedia.com
