Muthoot Microfin Limited has reported a strong financial performance for the quarter ended June 30, 2026, with Profit After Tax (PAT) rising to Rs. 81.3 crore, registering a 12-fold increase year-on-year and a 14.4 per cent rise over the previous quarter. The company attributed the performance to higher disbursements, improved collections, better asset quality and portfolio diversification.
The company’s Gross Loan Portfolio (GLP) grew 18 per cent year-on-year to Rs. 14,457.2 crore, while disbursements reached Rs. 2,645 crore, marking the highest first-quarter disbursements in the company’s history and a 48.9 per cent increase over the corresponding quarter last year.
Muthoot Microfin continued to diversify its lending portfolio, with the non-JLG portfolio expanding to 24 per cent, driven by growth in the Small and Micro Enterprise Individual Loan segment. During the quarter, the company also commenced gold loan disbursements under its referral and co-lending partnership with Muthoot Fincorp Limited.
Total income increased 20 per cent year-on-year to Rs. 670.6 crore, while Pre-Provision Operating Profit (PPOP) rose 43.3 per cent to Rs. 198.5 crore. Net Interest Margin (NIM) remained stable at 12 per cent.
The company reported further improvement in asset quality. Gross Non-Performing Assets (GNPA) declined to 3.70 per cent, improving by 115 basis points year-on-year and 19 basis points sequentially. Net Non-Performing Assets (NNPA) reduced to 1.05 per cent, while credit cost improved to 2.6 per cent, remaining below the company’s guided range of 2.7 per cent to 3 per cent for the financial year.
Collection efficiency also strengthened during the quarter, with overall collection efficiency improving to 97.97 per cent, while X-bucket collection efficiency remained at 99.89 per cent. Digital collections accounted for 40.5 per cent of total collections, compared with 23.1 per cent in the corresponding quarter of the previous year.
The company raised Rs. 2,733 crore during the quarter, while the average cost of borrowing declined to 10.13 per cent from 10.27 per cent in FY26. It maintained liquidity with Rs. 1,328 crore in liquid funds and HQLA-GSec investments, along with Rs. 2,500 crore of Direct Assignment and Pass Through Certificate sanctions and Rs. 1,485 crore of unutilised term funding sanctions.
Capital Adequacy Ratio (CRAR) improved to 24.9 per cent as of June 2026 from 23.9 per cent in March 2026.
The company also received a credit rating upgrade from CRISIL, with its long-term rating revised to AA-/Stable from A+/Positive, while its A1+ Commercial Paper rating was reaffirmed.
Commenting on the performance, Thomas Muthoot, Chairman and Non-Executive Director, Muthoot Microfin, said the company witnessed improving collection trends and a more stable operating environment during the quarter. He added that the CRISIL rating upgrade reflected the company’s strengthening credit profile and supported its efforts to diversify its lending business through expansion of the non-JLG portfolio, the Small Enterprise Loan segment and gold loans under co-lending partnerships. He also reiterated the company’s Vision 30-30, which targets Rs. 30,000 crore in AUM, a more balanced portfolio and Return on Equity of over 20 per cent by FY30.
Sadaf Sayeed, CEO, Muthoot Microfin, said the company recorded its highest-ever first-quarter disbursements, with the non-JLG portfolio contributing around 24 per cent of the total portfolio. He said that improved collection efficiency, moderation in credit costs, and better asset quality reflected the portfolio’s resilience and supported balanced growth while maintaining profitability. He added that the company would continue to focus on expanding its diversified product portfolio, strengthening customer relationships, and improving operational efficiency through technology.
Send news announcements/press releases to:
editor@thefoundermedia.com
