Muthoot Finance Q4 FY21 Earnings Call Highlights

Management:

George Alexander Muthoot - Managing Director

Oommen K. Mammen - Chief Financial Officer

K.R. Bijimon - Chief General Manager

Q4 performance:

• Muthoot Finance reported growth in gold AUM at 27% YoY in Q4 FY21.
• Interest income increased from Rs 27,169 Mn in Q3 FY21 to Rs 27,891 Mn in Q4 FY21; 2.7% QoQ growth.
• PBT increased from Rs 13,315 Mn in Q3 FY21 to Rs 13,496 Mn in Q4 FY21.
• PAT increased from Rs 9,914 Mn in Q3 FY21 to Rs 9,957 Mn in Q4 FY21.
• Total liabilities decrease by 1% from Rs 465,517 Mn in Q3 FY21 to Rs 460,196 Mn in Q4 FY21.
• Gold Loan Assets Under Management as of march’21 is around Rs 519 Bn which grew from Rs 496 Bn in Q3 FY21.
• Average Gold Loan Per Branch is Rs 112 Mn in Q4 FY21 which grew from Rs 107 Mn in Q3 FY21.
• ROE in Q4 FY21 was 27%.
• NIMs declined by 27bps QoQ to 14.27%
• Capital adequacy ratio was 27.5% as on March’21
• Price to earnings ratio as on March’21 was 13 and price to book value ratio was 3.2.
• During Q3FY21, added 3.88 lakh new customers and 3.61 lakh new customers in Q4FY21.

FY21 performance of the group:

• The total gross loan assets of the group grew from Rs 468,705 Mn in FY20 to Rs 582,802 Mn in FY21; YoY growth is 24%.
• Consolidated profit of the group grew from Rs 31,687 Mn in FY20 to Rs 38,189 Mn in FY21; YoY growth is 21%.
• Contribution of Muthoot finance in the consolidated gross loan assets of the group is 90% and the remaining is of its subsidiaries.
• Contribution of Muthoot finance in the profit of the group is 97% and the remaining is of its subsidiaries.
• The standalone profit of Muthoot finance ltd. in FY21 is Rs 37,222 Mn which grew from Rs 30,183 Mn in FY20.
• The total consolidated assets grew from Rs 548,816 Mn in FY20 to Rs 686,414 Mn in FY21.
• The total standalone assets grew from Rs 504,597 Mn in FY20 to Rs 634,649 Mn in FY21.
• The total loan disbursements in the year is Rs 1.24 lakh crore.
• Loan assets under management is Rs 526,223 Mn.
• The consolidated profit after tax is now at Rs 3,819 crores, which is a 21% year-on-year growth.
• Standalone profit before tax increased by 23% YoY; it grew from Rs 40,574 Mn in FY20 to Rs 50,065 Mn in FY21.
• Standalone profit after tax increased by 23% YoY; it grew from Rs 30,183 Mn in FY20 to Rs 37,222 Mn in FY21.
• Gold jewellery kept as security is 171 tonnes.
• Interest income increased by 21% YoY; it grew from Rs 85,644 Mn in FY20 to Rs 103,285 in FY21.
• ROE in FY21 was 28%.

Loan assets:

• Interest Income on Average Loan Assets was 22.2% in FY21 and was 21.7% in Q4 FY21.
• Interest Expense on Average Loan Assets was around 8% in FY21 and was 7.4% in Q4 FY21.
• Net Interest Margin in FY21 was around 14.24% and 14.27% in Q4FY21.
• return on average loan assets in FY21 was around 8% and 7.8% in Q4 FY21.
• operating expenses to average loan assets ratio was around 4% in FY21.

Liability mix: 

• Borrowings from Banks/Fis - 198,331 Mn (43%)
• Secured Non-Convertible Debentures – Listed – 135,656 Mn (29%)
• External Commercial Borrowings- Senior secured Notes – 73,111 Mn (16%)
• Commercial Paper – 38,540 Mn (8%)
• Other Loans – 9,817 Mn (2%)
• Secured Non-Convertible Debentures (Muthoot Gold Bonds) – 2,635 Mn (1%)

Subsidiaries highlights:

• Muthoot Homefin: Disbursements in FY 2021: Rs1,010 Mn. AUM as on Mar 31, 2021: Rs. 17,042 Mn, Loan Book as on Mar 31, 2021: Rs14,040 Mn, ROA for FY 2021: 0.75%, ROE for FY 2021: 2.92%
• Belstar MFI- Book grew to Rs 33 bn from Rs 26 bn (+25% YoY); PAT has decline due to higher provisions. Stage 3 stood at Rs 0.78 bn as on Mar’21, made Rs 0.80 bn additional provision during FY21.
• Home finance- book did not grew but this year expects good disbursal.
• Vehicle finance- Book did not grew but they’re restarting this business from July onwards.

Domestic credit ratings:

• long-term rating:

      CRISIL - AA + stable

      ICRA - AA + stable

• Highest Rating among gold loan companies