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The net profit of Muthoot Capital Services declined 31 per cent to ₹3.75 crore in the first quarter of this fiscal (2015-16) from ₹5.41 crore in the corresponding year-ago quarter.
The drop in profit was the result of higher expenses, mainly due to the doubling of provisions and write-offs to ₹5.29 crore.
While income has been growing, the reduction in net profit is partly on account of the five-month norm of recognising non-performing assets and 0.30 per cent standard asset provisioning adopted from the first quarter itself, Thomas George Muthoot, Managing Director, Muthoot Capital, said.
The company recorded a total income of ₹50.65 crore for the quarter, a 12.06 per cent growth over the ₹45.20 crore logged in the previous quarter.
The total loan portfolio increased to ₹878.16 crore from ₹705.30 crore, an increase of 24.51 per cent.
R Manomohanan, Chief Executive Officer, said that the immediate focus will be on NPA reduction.
The company, a leading provider of two-wheeler finance in the South, plans to expand operations in the eastern region later this year. It has already commenced expanding its business in the North to consolidate its position as a national player in the two-wheeler financing segment.
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