MUTHOOT CAPITAL SERVICES LTD REGISTERS RECORD QUARTERLY PROFITS

·  Total AUM stands at Rs 1170 crore as on Sept 30, 2016

·  Single month lending crosses Rs 100-cr mark for the first time

by Suman Gupta

Kochi, Oct 24:  Riding on the overall buoyancy in the economy, robust 2 wheeler sales, higher geographical spread and various innovative strategies, the Muthoot Capital Services Limited, part of the 129-year-old Muthoot Pappachan Group, reported Rs 8.06 crores profit for the second quarter of FY 2017, registering the highest quarterly profit so far for the two-wheeler financing major.

According to the unaudited financial results, as approved by Board of Directors here today, the profit for the quarter ending September 30, 2016 rose 30% over the corresponding quarter of the previous year, from Rs 6.18 crores to Rs 8.06 crores. This was achieved inspite of the Company having moved to a reduced four-month norm for determining NPAs. The total income for the quarter under review touched Rs 70.08 crore, against Rs 56.50 crores for the corresponding quarter of the previous year, showing a growth of 24%.

The company disbursed two wheeler loans of Rs. 106 crores in September 2016, crossing the Rs 100 crores mark in a single month for the first time. The total AUM (Asset under Management), including the managed portfolio of Rs. 88 crores, reached Rs 1170 crore at the end of the quarter. The NPAs in absolute terms went lower on quarter on quarter basis to Rs 66.67 crores (5.7% of the total AUM) as on 30th June 2016 from Rs 69.37 crores (6.4% of the total AUM) as on 30th June 2016.

Considering the cumulative performance for the two quarters in the half-year ended 30th September 2016, the Company achieved a total income of Rs 134.33 crores compared to Rs 107.15 crores for the corresponding period last year, recording a growth of 25%. The finance expenses increased by 21% from Rs 42.54 crores to Rs 51.62 crores during the period. The overall Net Interest Income (NII) went up from Rs 64.61 crores to Rs 82.71 crores. The profit before tax for the half year recorded a growth of 28% to Rs 19.33 crores compared to Rs 15.15 crores for the corresponding half year last year. The Company recorded net profit amounting to Rs 12.54 crores for the half year ended 30th September 2016, which is 26% higher compared to Rs 9.93 crores for the corresponding period last year.

“The promising macro indicators and the overall improvement in the sentiments that triggered higher rural demand contributed to our excellent performance.  The encouraging festival sales in our core market of Kerala during Onam was another factor for the steady growth that places us comfortably on the course to achieve the annual targets. We expect major growth in our disbursement volumes in the North during this Diwali. The relaunch of the Ladies Only scheme and emphasis on Students Only Scheme will boost overall volumes,” said Mr. Thomas George Muthoot, Managing Director, Muthoot Capital Services Ltd.

“We continued to strengthen our footprints in North Indian States and West Bengal in the recent months. However, the actual gains from these markets will get reflected in our numbers only from the second half of this fiscal. Apart from the increased focus on digital mode and marketing strategies, a key contributor to the overall performance was our internal strategies like outsourcing manpower and services in the new locations. We are in the process of tying up with an entity for our digital marketing initiatives which will help improve volumes in 2 wheeler and 4-wheeler financing significantly,” Mr. R. Manomohanan, CEO, Muthoot Capital Services Ltd.

“We are optimistic of a higher growth over the next few years. We are also looking at additional sources of funding including NCDs and more securitization transactions. During the quarter, we have closed a Securitisation transaction wherein a pool of our loan assets amounting to Rs 111 crores was sold to a Special Purpose Vehicle (SPV), enabling the SPV to issue Pass Through Certificates (PTCs) amounting to Rs 104 crores, which were purchased by investors. This enabled the Company to lower cost of funds and improve capital adequacy,” he added.

About Muthoot Capital Services Ltd

Muthoot Capital Services Ltd. (MCSL) is the first listed entity of the 129-year-old Muthoot Pappachan Group. A Deposit taking Non-Banking Financial Company (NBFC) listed on BSE and NSE, MCSL offers financial solutions including Vehicle Loans (2 wheeler loans). MCSL is presently active in retail financing and caters to the requirements of borrowers both in rural and semi-urban areas. The Company has so far disbursed more than 650,000 loans, since starting the two- wheeler financing activity in 2008. The company is also credited with many innovative schemes, including the hugely popular “Ladies Only” scheme for financing women for purchase of two wheelers at concessional terms. The Company's direct approach helps arrive at solutions that best suit the financial requirements of individuals and small entrepreneurs. The Company being a deposit taking ‘Category A’ NBFC, also accepts deposits from public at attractive rates of interest. The company is currently servicing more than 2,500 dealerships in 15 states with a strong presence in Honda and Hero counters which together contribute more than 80% of the total business.