Muthoot Microfin Limited has informed the Exchange regarding a press release dated August 11, 2025, titled "Press Release on Unaudited Financial Results Q1 ".
MUTHOOTMF · price
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On the reaction day the stock moved 4.0 pts less than Nifty Microcap 250 and 3.9 pts less than its Finance peers, over the same two closes: a difference in percentage points, not a measure of what the filing did.
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Muthoot Microfin reported a weak Q1 FY26 with profit after tax collapsing 94.5% YoY to just Rs. 6.2 crore (from Rs. 113.2 crore a year ago), as the microfinance sector faced stress and the company prioritised portfolio quality over growth. Net Interest Income fell 16.8% to Rs. 342.3 crore and Pre-Provision Operating Profit dropped 44.3% to Rs. 138.5 crore, with cost-to-income ratio ballooning to 60.3% from 42.2%. Asset quality worsened sharply with Gross NPA rising to 4.85% (from 2.10%) and Net NPA at 1.58%, though the company kept credit costs at 4.3% towards the lower end of guidance with a Provision Coverage Ratio of 68.5%. Gross Loan Portfolio was largely flat at Rs. 12,252.8 crore (up 0.3%) across 34.1 lakh borrowers and 1,726 branches, while the company entered Northeast India (Assam) and began disbursing secured loans like Gold Loans and Micro LAP. Capital position remains strong with CRAR of 27.85%, liquidity of Rs. 536.5 crore plus Rs. 1,002 crore undrawn sanctions, and CRISIL reaffirmed its A+/Stable rating on long-term facilities.
Near-term earnings are under significant pressure due to elevated credit costs, margin compression, and slower growth, which could weigh on the stock. However, the strong capital base, healthy liquidity, rating reaffirmation, and strategic moves into secured lending and new geographies may support a recovery in the second half of FY26.