Muthoot Finance gains after posting strong Q1 numbers


Muthoot Finance gained 2.65% to Rs 327.10 at 10:45 IST on BSE after net profit rose 47.56% to Rs 270.26 crore on 13.85% increase in total income to Rs 1300.81 crore in Q1 June 2016 over Q1 June 2015.
The result was announced after market hours yesterday, 28 July 2016.

Meanwhile, the BSE Sensex was down 70.10 points, or 0.25% to 28,138.52.

High volumes were witnessed on the counter. On BSE, so far 1.54 lakh shares were traded in the counter, compared with an average volume of 75,434 shares in the past one quarter. The stock hit a high of Rs 340, which is also a record high for the stock. The stock hit a low of Rs 326.35 so far during the day. The stock hit a 52-week low of Rs 152 on 23 September 2015. The stock had outperformed the market over the past one month till 28 July 2016, rising 14.15% compared with 6.35% rise in the Sensex. The scrip had also outperformed the market in past one quarter, advancing 52.06% as against Sensex’s 10.18% rise.

The large-cap company has an equity capital of Rs 399.05 crore. Face value per share is Rs 10.

Muthoot Finance said that retail loans registered an increase of 48% to Rs 1481 crore in Q1 June 2016 over Q1 June 2015. Asset under management (AUM) has increased by 6% at Rs 25860 crore at the end of 30 June 2016 as against Rs 24409 crore as on 30 June 2015.

The company has infused Rs 40 crore as fresh capital acquiring 38.23% of the expanded equity share capital of Belstar Investment and Finance Private Limited (BIFPL), thereby holding 46.83% in the company in July 2016. Further acquisition of 10.32% from the existing shareholders is expected to be completed soon thereby taking the total holding to 57.15% making it a subsidiary. During the quarter its loan portfolio grew by 9% at Rs 287 crore.

Commenting on the results, M G George Muthoot, Chairman stated that the current excellent performance could be attributed to total revamp in collection mechanism, structural changes made in operations and improved customer sentiment due to better practices adopted by the company. During Q1 June 2016, the company could reduce the auctions drastically which is a step in the right direction. The company should expect growth momentum to continue with economic activities expected to pick up on account of good monsoon, he added.

Speaking on the occasion George Alexander Muthoot, Managing Director said, that forays into other business segments is yielding benefits to the group and business of these segments are picking up. The company would like to tread a cautious path rather than be aggressive on these new segments, he added.

Muthoot Finance is the largest gold financing company in India in terms of loan portfolio.