Despite the Reserve Bank curbs from February and bad loans nearly doubling, the largest pure-play gold loan financier Muthoot Finance today reported a 69 per cent jump in the March quarter net profit at Rs 235 crore, up from Rs 139.32 crore in the year-ago period.
As gold prices rose to record highs, which enabled the company to lend more money to borrowers at a higher loan-to-value terms of up to 80 per cent, revenues rose 71 per cent to Rs 1,288 crore for the January-March quarter, up from Rs 753 crore a year ago.
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These robust numbers come despite the RBI clamping down on gold loan companies in February wherein it had capped the loan to value at 60 per cent, and During the year, and the company witnessing the bad loan portfolio nearly doubling (93 per cent) to 0.56 per cent from 0.29 per cent.
Commenting on the results company chairman MG George Muthoot said the operating environment was substantially redefined on account of the restrictions imposed by the Reserve Bank in February on the maximum loan that could be given against the value of the jewels pledged.
"The company is taking every step to sustain high growth and profitability in the changing business environment complying with the RBI directives," he said.
The Kochi-based company declared a dividend payout of Rs 4 a share for the fiscal.
For the full fiscal, income from operations nearly double (97 per cent) to Rs 4,536 crore and profit after tax jumped 80 per cent to Rs 892 crore as against Rs 494 crore the previous fiscal.
Market lapped up the numbers with the Muthoot counter rising 1.70 per cent to Rs 128.75, after hitting an intra-day high of Rs 129.90 and low of Rs 125.20 on the BSE, whose main index Sensex rose 112 points, snapping a five-day losing streak.
The company recommended a 40 per cent dividend or Rs 4 per share.
During the fiscal the company's retail loan assets under management rose 55 per cent to Rs 24,417 as against Rs 15,728 per cent while the total volume of gold under its custody rose 22 per cent to 137 tonne from 112 tonne.
Return on average retail loans 4.40 per cent against 4.24 per cent, while return on average equity declined 41.90 per cent 51.52 per cent.
During the year, the capital adequacy ratio jumped to 18.29 per cent form 15.82 per cent.
Branch network rose 34 per cent to 3,678 from 2,733 spanning 21 states and 4 four UTs, pushing up head count 52 per cent to 25,351 from 16,688.
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