Muthoot Finance Ltd. reported its highest ever quarterly profit on account of a big decline in the provisions of the gold financing company.
Net profit increased 30 percent to Rs 351.07 crore in the April-June quarter compared to the same period last year, the company said in an exchange filing on Tuesday. Provision for bad loans plummeted 97 percent sequentially to Rs 6.63 crore.
“There is no crucial provisional required for this year, as we already have a total provision of approximately Rs 600 crore on the balance sheet till date,” George Alexander Muthoot, managing director of Muthoot Finance said in a phone interview.
Net interest income grew by 16 percent to Rs 859.66 crore in the first quarter of the fiscal year.
The non-banking finance company's assets under management rose around 2 percent to Rs 574 crore as of June 30 on a year-on-year basis, Muthoo said. This was lower than the management's expectation of a 4 percent growth on account of the lingering impact of demonetisation and the disruption caused by the rollout of the Goods and Services Tax. Muthoot expects around 10-15 percent growth in AUMs for the year as a whole.
The company will make an additional investment of Rs 38.72 crore in its subsidiary Muthoot Homefin India Ltd. by purchasing 88 lakh equity shares at Rs 44 apiece, Muthoot Finance said in its media statement. Additionally, it will raise fresh capital to the tune of Rs 100 crore through fresh issue of 2.27 crore equity shares at Rs 44 per share. Post the investment, MHIL will become wholly owned subsidiary of Muthoot Finance.
We would like to grow it very well in the next 2-3 years. May be reach to Rs 3,500-4,000 crore in the next three years.George Alexander Muthoot, MD, Muthoot Finance
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