Muthoot Microfin Reports Strong Q2FY25 Financial Performance with Increased AUM and NIM

Key Takeaways from the Financial Performance

• Muthoot Microfin’s Assets Under Management (AUM) grew by 15.2% YoY, reaching ₹12,518 crore in Q2FY25.
• Muthoot Microfin expanded its borrower base by 7.7% YoY, reaching 34 lakh borrowers.
• The company’s branch network grew by 18.9%, with 31 new branches added, bringing the total to 1,593.
• The southern region now represents 50% of the company’s portfolio following its expansion into Telangana and Andhra Pradesh.

The company’s Assets Under Management (AUM) increased by 15.2% year-on-year (YoY), rising from ₹10,867 crore in Q2FY24 to ₹12,518 crore in Q2FY25. Total income grew by 18.0% YoY, from ₹565 crore to ₹667 crore. Net Interest Income (NII) also saw an increase of 18.1% YoY, moving from ₹338 crore to ₹399 crore. The Pre-Provision Operating Profit (PPOP) rose by 26.1% YoY, from ₹187 crore to ₹236 crore.

Despite these positive trends, the Profit After Tax (PAT) experienced a decline of 43.8% YoY, decreasing from ₹109 crore to ₹62 crore. This decline was attributed to an additional macro-enabled overlay provision of ₹31 crore made in response to industry concerns and potential disruptions caused by floods or political activism.

The company reported a Gross Non-Performing Asset (GNPA) ratio of 2.70%, up from 2.37% in the previous year. The Net NPA (NNPA), net of Stage III provisions, stood at 0.97%, compared to 0.88% last year. Muthoot Microfin maintained a robust liquidity position with ₹706 crore in unencumbered cash and cash equivalents, which is approximately 6% of total assets, alongside unutilised sanctions totalling ₹3,566 crores.

The borrower base grew by 7.7% YoY, increasing from 32 lakhs to 34 lakhs across a network of 1,593 branches, which reflects an 18.9% increase in branch count as the company added 31 new branches during the quarter. Notably, the southern region now constitutes 50% of the company’s portfolio as it expands into two new states—Telangana and Andhra Pradesh.

Speaking on the performance, Mr. Thomas Muthoot, Managing Director of Muthoot Microfin, commented- "Amid recent industry challenges, Muthoot Microfin delivered a solid performance this quarter, achieving a 15.2% year-on-year increase in our Gross Loan Portfolio, now at ₹12,518 crore. We also added 31 new branches during this period. Our disciplined lending practices, backed by robust underwriting standards and prudent NATCAT policies, have driven sustainable portfolio growth while preserving asset quality. This quarter, we maintained a GNPA of 2.70% and NNPA of 0.97%, underscoring the strength of our portfolio. As we look ahead, we are prepared to accelerate our growth trajectory in this evolving industry landscape. With the implementation of SRO guardrails, we are committed to upholding high standards that will further strengthen stakeholder confidence and enhance the industry’s reputation.” 

Commenting on the financial results, Mr. Sadaf Sayeed, CEO, of Muthoot Microfin, said- “The company has cautiously inched up disbursements to Rs. 2,674 crores in the September quarter, up from ₹2,204 crores in the previous quarter and returned to similar levels as last year. We expect growth to reaccelerate in the coming quarters with the usual seasonal upswing coupled with our focus on harnessing existing customers and strengthening our core geographies. Our asset quality remains stronger than our peers led by our core mature southern markets and our robust underwriting and collection practices. During Q2, we have gone a step further and adopted a stance of being far more conservative providing additional Macro-enabled overlay of 31.2 crore given bulging industry concerns. This increase in provisioning has resulted in creating a Rs.153cr surplus to IRAC prudential norms. Our willingness to invest against profitability has negatively impacted our ROA during the quarter which has gone down to 2.00%. We continue to underpin our ambition of industry-leading returns and recalibrate our FY25 ROA guidance to 3.0-3.5% acknowledging the uncertainty prevailing within the industry while maintaining a continuous focus on balancing growth, profitability, and liquidity.”

About Muthoot Microfin Limited

Muthoot Microfin Limited, part of the Muthoot Pappachan Group, is a leading listed microfinance institution in India with over 138 years of legacy. The company focuses on promoting entrepreneurship among women in rural areas by providing income-generating microloans. As of September 30, 2024, Muthoot Microfin serves 3.4 million active customers through 1,593 branches across 20 states and 369 districts, with a Gross Loan Portfolio (GLP) of ₹12,518.5 crore. It is also a part of the S&P BSE Financial Services Index.

Key Takeaways from Ramkrishna Forgings Corporate Guarantee:

• Ramkrishna Forgings Limited has provided a corporate guarantee of up to USD 5 million for its wholly-owned subsidiary, Ramkrishna Forgings LLC.
• The guarantee is issued in favour of JPMorgan Chase Bank, N.A., to support the subsidiary’s working capital needs.
• The transaction complies with the Companies Act, 2013, and SEBI regulations, and is done at arm's length.

The guarantee has been provided to JPMorgan Chase Bank, N.A., to assist the subsidiary in meeting its working capital requirements. 

The corporate guarantee complies with the Companies Act, 2013 provisions, and SEBI regulations. 

Ramkrishna Forgings holds 100% of the equity share capital of Ramkrishna Forgings LLC, and the transaction has been carried out at arm’s length. At present, there is no significant impact of this guarantee on the listed entity.

About Ramkrishna Forgings Limited:

Ramkrishna Forgings Limited (RKFL), established in 1981, is a leading global player in the metal forming industry, specialising in producing high-quality forged, machined, and fabricated products. With over 40 years of experience, RKFL serves diverse sectors, including automotive, railways, farm equipment, mining, oil & gas, power, and general engineering. The company is known for its commitment to engineering excellence, adopting cutting-edge technologies, and maintaining a skilled workforce. RKFL continues to enhance its manufacturing capabilities, driving success through innovation and talent management, and is recognised for delivering world-class products to its customers across the globe.

Key Takeaways from GAIL’s Financial Performance:

• GAIL posted Rs 32,931 crore in revenue and Rs 2,672 crore PAT.  
• H1 revenue reached Rs 66,622 crore with a PAT of Rs 5,396 crore.  
• Transmission was 130.63 MMSCMD, gas marketing at 96.60 MMSCMD.  
• Rs 1,885 crore was spent on capex, with improved profitability in petrochemicals.

While this is slightly lower than the previous quarter’s Rs 33,692 crore, the company’s Profit Before Tax (PBT) stood at Rs 3,453 crore, and its Profit After Tax (PAT) was Rs 2,672 crore. 

For the first half of FY25 (April to September), GAIL saw a significant increase in both revenue and profit. The company’s total revenue reached Rs 66,622 crore, up from Rs 64,050 crore in H1 FY24. PAT for the half-year period increased to Rs 5,396 crore from Rs 3,817 crore, marking the highest-ever half-yearly earnings for GAIL.

The company also reported strong performance in its natural gas transmission and marketing volumes, with 130.63 MMSCMD of gas transmitted and 96.60 MMSCMD marketed in Q2 FY25. Additionally, the petrochemical segment showed improvement, turning a profit of Rs 157 crore in Q2 FY25, compared to a loss of Rs 42 crore in Q1 FY25.

In terms of capital expenditure, GAIL spent Rs 1,885 crore in Q2 FY25, primarily on pipelines and petrochemical projects, taking the total capex for H1 FY25 to Rs 3,544 crore.

About GAIL (India) Limited:

GAIL (India) Limited is India’s leading natural gas company, established in 1984 under the Ministry of Petroleum & Natural Gas. The company operates a vast network of over 16,240 km of pipelines and holds a dominant market share in gas transmission and trading. GAIL is also a key player in petrochemicals, with a large gas-based complex in Uttar Pradesh and other projects in Assam and Gujarat. It is expanding its presence in renewable energy, including solar, wind, and biofuels. Additionally, GAIL is a pioneer in the City Gas Distribution business, serving millions of customers across India.

Key Takeaways from the Announcement

• Hero MotoCorp showcased its new product lineup at EICMA 2024, including the Xpulse 210, Xtreme 250R, and Karizma XMR 250 motorcycles, and the VIDA Z electric scooter, marking a significant milestone in its global mobility vision. 
• The company is set to enter European and UK markets by mid-2025, expanding its global footprint with products tailored to these regions and leveraging its European Tech Centre for R&D advancements. 
• The company continues to uphold its “Make in India for the World” ethos, remaining a global leader in motorcycles and scooters while actively investing in innovative mobility solutions for future growth.

The Executive Chairman, Dr. Pawan Munjal, emphasised Hero’s dedication to producing reliable and resilient products under the "Make in India for the World" ethos, a core principle guiding Hero’s operations and global ambitions. The company also announced plans to expand into multiple European markets and the UK by mid-2025, with the launch of its new VIDA Z electric scooter, to be followed by high-capacity motorcycles. 

At EICMA, Hero MotoCorp unveiled three premium motorcycles—the Xpulse 210, Xtreme 250R, and Karizma XMR 250 — each tailored for distinct riding styles. 

The Xpulse 210, developed with input from Hero MotoSports, is an adventure motorcycle with a powerful 210cc DOHC liquid-cooled engine, designed for off-road and city riding. The Xtreme 250R, aimed at street enthusiasts, boasts a 250cc liquid-cooled engine with a 4-valve system, offering peak power and torque with enhanced stability and grip for swift performance. The Karizma XMR 250, a fully faired sports motorcycle, features a 250cc liquid-cooled DOHC engine, integrated with design elements like racing-inspired winglets and height-adjustable handlebars for ergonomic comfort and agility. 

Complementing this range, the VIDA Z electric scooter is designed for global appeal with advanced features such as multiple charging modes, a removable battery, and connected tech through the MY VIDA App.

Hero MotoCorp established alliances with distributors in Italy, Spain, France, and the UK as it looked to strengthen its growth within the European expansion. Hero would utilize the research and development from its German Tech Centre in designing its products and technologies for enhancements to existing and new offerings according to the European marketplace's requirements. Expansion would eventually help Hero to be the leader of the globe for two-wheeler manufacturers.

Hero MotoCorp operates in 48 countries of Asia, Africa, and Latin America, and it has retained global leadership since its inception, selling over 120 million motorcycles and scooters.

About Hero MotoCorp Limited

Headquartered in New Delhi, Hero MotoCorp Ltd. is the world’s largest manufacturer of motorcycles and scooters by annual unit sales, a title it has held for 23 years. Since its founding, the company has sold over 120 million two-wheelers worldwide. With a presence in 48 countries across Asia, Africa, and Latin America, Hero MotoCorp operates eight manufacturing facilities—six in India and one each in Colombia and Bangladesh. Its research and development centres, the Centre for Innovation and Technology (CIT) in India and Tech Centre Germany (TCG) near Munich, drive innovation. Hero MotoCorp is also a prominent sponsor of various sports, including golf, football, field hockey, cricket, and motorsports, with golf legend Tiger Woods as its global corporate partner.