Muthoot Microfin stocks surge 14% as net more than doubles in Q3

Muthoot Microfin stocks soared 14 percent in intra-day deals on Tuesday, January 30, as the company more than doubled its net profit for the December quarter.

Its net profit for the quarter under review surged 119 perc ent year-on-year (YoY) to Rs124.60 from Rs56.9 crore in the year-ago period. Meanwhile, its net interest income (NII) jumped 53.07 per cent YoY to Rs 343.07 crore versus Rs224 crore in the same period last year. Total income also rose 52.61 per cent YoY to Rs584.83 crore in Q3FY24.

Furthermore, the company's disbursements in the quarter grew 19.4 per cent YoY to Rs2,592.10 crore from Rs2,170.5 crore last year; and assets under management rose 39 per cent YoY to Rs11,458.10 crore in Q3FY24 from Rs8,264.6 crore in Q3FY23.

Its net interest margin (NIM) also advanced 86 bps YoY to 12.6 per cent in the quarter under review from 11.7 per cent last year. Similarly, asset quality also improved with gross non-performing assets (GNPA) at 2.29 per cent, down 1.2 per cent YoY and net NPA down 0.64 per cent YoY to 0.33 per cent.

"The improved NPA (non-performing assets) figures (NNPA of 0.33 pe rcent) underscore our commitment to maintaining a healthy loan portfolio. All the key indicators are showing tremendous growth and the macro-economic outlook of the country is favourable to the industry for us to sustain this growth rate," Sadaf Sayeed, CEO, Muthoot Microfin, said in a press release.

Its return ratios also showed significant advancement with RoA at 4.5 per cent in Q3FY24, up 1.5 per cent YoY from 2.9 per cent; and RoE at 26 per cent in the December quarter this financial year, up 9.58 per cent YoY from 16.4 per cent last year.

The stock rose as much as 13.9 per cent in intra-day deals to its day's high of Rs266.55. It is now up over 17 per cent from its 52-week low of Rs227.45, hit on January 18 this year, however, still 5 per cent away from its record high of Rs280.80, hit on December 26, 2023. In January till date, the stock has gained almost 3 per cent.

Muthoot Microfin's Rs960 crore initial public offering (IPO) had a tepid debut on the stock exchanges in December 2023. The company's shares were listed at a 5.4 per cent discount to the issue price of Rs291. Despite being subscribed 11.52 times at the close of the IPO, the market reception on the listing day was subdued. Post listing, the shares of Muthoot Microfin have primarily traded within a narrow range, closely aligned with the listing price.