Muthoot Capital’s Q4 net profit down 15 per cent

Muthoot Capital Services Ltd (MCSL) has posted a net profit of ₹18.4 crore for Q4 of 2018-19, down 15 per cent from ₹21.5 crore during the same period last year.

As per the audited financial results, the total income increased to ₹136.7 crore during the quarter from ₹118.8 crore of the same period last year, a growth of 15 per cent.

“The drop in net profit was blamed on increased financing as well as collection and marketing costs and also on account of deferment of recognition of income on receipt basis,” a company spokesman said. The latter pertained to securitisation transactions (including material transactions aggregating to ₹366.23 crore entered into towards the end of the financial year) in in accordance with RBI guidelines, he added.

Several headwinds

The company had to weather several headwinds during the year, ranging from floods and cyclone in Andhra Pradesh and Tamil Nadu, and the Supreme Court order on third party insurance for a five-year period payable at the time of purchase.

The turmoil in the NBFC sector resulting in a liquidity crunch and de-growth in vehicle retail sales over the last couple of quarters also had weighed in on the performance.

An NBFC of the Muthoot Pappachan Group listed on the BSE and NSE, the company offers financial solutions including vehicle loans (two-wheeler and used four-wheeler loans).

High growth

For the full year ending March 31, 2019, the net profit printed in at ₹82.4 crore against ₹53.7 crore of the previous year, registering a growth of 54 per cent.

The amount disbursed year-on-year rose eight per cent from ₹1969.6 crore in 2017-18 to ₹2135.1 crore during the just-concluded 2018-19 financial year.

Total Assets under Management touched ₹2741.1 crore, including a securitised portfolio of ₹656.8 crore. The customer base grew 22 per cent to touch 6,97, 374 with the earnings per share rising from ₹36.4 to ₹50.1.

Thomas George Muthoot, Managing Director, MCSL, said that the growth has been both rapid as well as sustained over the years, reflecting strong fundamentals as well as strategic prowess. “We are continually looking at fresh business ideas, new products and solutions for our core customer profile and are driven by technology,” he said.

“We are extremely lucky to have the confidence of the lenders and investors evidenced in the large amount of sanctions last year. We capped the year with one of the biggest securitisation deals with HDFC AMC,” he said

Focus areas

Madhu Alexiouse, Chief Operating Officer, MCSL, said that in view of the geographical de-risking strategy initiated three years back, the company grew its non-South disbursements from 6.2 per cent to 30 per cent.

“We have made steady progress in the used car business, and we expect to further strengthen our focus in the upcoming year,” he said.

MCSL was recognised as India’s best company for 2018 in the automobile financing sector and CRISIL had upgraded its ratings to ‘A’.

Digitalisation is a key area of focus for the group. Alexiouse said that the company’s customer app, Mpower, had received a positive feedback with more than 65,000 downloads. “This showcases the country’s increasing appetite for adopting technology. The company will continue to innovate and make its products and solutions more accessible to customers through technology.”

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