Muthoot Finance Q1 Profit Dips 7 Per Cent to Rs 180 Crore

Kochi: Muthoot Finance Ltd, the largest provider of loan against gold in India, on Monday reported a 7.21 per cent dip in profit after tax at Rs 180 crore for the first quarter that ended on June 30, 2014.

The company had reported a PAT of Rs 194 crore for the corresponding quarter of fiscal year 2013-14.

Total income stood at Rs 1,092 crore, down 15 per cent from Rs 1,286 crore in the year-ago period.

Standard asset provisioning stood at 0.46 per cent at the end of the quarter under review, as against the regulatory requirement of 0.25 per cent.

"We hope the new RBI policy and new policies of the government will jumpstart the economy," Muthoot Finance managing director George Alexander Muthoot said.

De-growth in gold loan portfolio has further reduced to Rs 313 crore during the quarter as compared to Rs 645 crore in Q4 of 2013-14.

PAT has remained stable quarter-on-quarter and would have been higher by around Rs 7 crore but for higher depreciation on account of change in the calculation method based on useful life as per the new Companies Act, 2013 provisions.

For the next 12 months, the company expects 15 per cent growth in gold loans and 15-20 per cent increase in profit, Mr Muthoot said.

The company had re-activated branches after almost two years of turbulent and inactive period and was seeing 'positive results' at the grassroots level, he said.

Muthoot has added 100 branches since last year, although only one more branch was opened last quarter.

"The company has not closed down any branch nor retrenched employees," he said.

Profit has been flat and was the result of what was happening in the economy, executive director K P Padmakumar said.

Despite all the difficulties in NBFCs, customers were coming back, footfalls were increasing which was the main reason for the reduction in outstanding, he said.

Muthoot has also started re-structuring products to suit the needs of the customers, he said.