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Muthoot Capital Services Limited Reports Another year of Profitable Growth

In Business
April 26, 2019

Muthoot Capital Services Ltd (MCSL), one of India’s fastest growing NBFCs and the listed entity of Muthoot Pappachan Group, (also known as Muthoot Blue), today announced results for the quarter and the financial year ending March 31, 2019.

The company posted a net profit of INR 82.4 Crores, yet again demonstrating another year of strong profit growth and strong standing despite several headwinds including starting with the natural calamities faced during floods, followed by cyclone in AP/TN, the Apex Courts order on third party insurance for a 5 year period payable at the time of purchase and thereafter the turmoil in the NBFC sector which led to the recent liquidity crunch in the NBFC sector and de-growth in the vehicle retail sales over the last couple of quarters.

As per the audited financial results, as approved by the Board of Directors, the net profit showed a drop during the quarter, down from INR 21.5 crores to INR 18.4 Crores, recording a drop of 15 % from the same period last year. The total income increased to INR 136.7 during the quarter ended 31 st March 2019, from INR 118.8 during the same period last year, registering a growth of 15%.

The drop in the new profit was on account of the increased financing costs and also higher collection and marketing costs and also on account of deferment of recognition of income on receipt basis, in respect of securitization transactions (including material transactions aggregating to Rs 366.23 crs entered into towards the financial year end) in accordance with the RBI guidelines.

For the year ending March 2019, the Company reported a net profit of Rs 82.4 crores against Rs 53.7 crores in the last year, a growth of 54%. The amount disbursed saw a Y-o-Y increase of 8% from INR 1969.6 crores for the year ended 31 st March 2018 to INR 2135.1 crores for the year ended 31 st March 2019. The total AUM (Assets under Management) reached INR 2741.1 crores, including the securitized portfolio of INR 656.8 crores. The customer base registered a growth of 22% Y-o-Y to reach 697374 with the earnings per share rising from INR 36.4 to INR 50.1.

Commenting on the results, Thomas George Muthoot, Managing Director, Muthoot Capital Services Limited said, “Muthoot Capital Services Ltd.’s growth has been both rapid as well as, sustained over the years. The same reflects, both, strong fundamentals as well as strategic prowess with relentless & unwavering focus on the ethos of Empowering Human Ambition. While we bask in the glory of strong performance, we are continually striving to build an organisation and a business that’s a leader for many years to come in the future, too. We are continually looking at fresh business ideas, new products & solutions for our core customer profile and are driven by technology. We are extremely lucky to have the confidence of the Lenders and Investors, which has been confirmed by the large amount of sanctions that we got in the year that went by. We capped the year with one of the biggest securitisation deals with the numero uno, HDFC AMC. ”

Madhu Alexiouse, Chief Operating Officer, Muthoot Capital Services Ltd. said, “Such remarkable results, that too, year after year; particularly this year in spite of challenges & recent de-growth in auto-retail space, are a clear testimony of our strong business fundamentals. In view of the geographical de-risking strategy initiated about 3 years back, we grew our non-south disbursements from 6.2% to 30%. We have made steady progress in the used car business, and we expect to further strengthen our focus on this in the upcoming year. The past year has been quite rewarding for us where MCSL was recognized as India’s Best Company of the Year 2018 in Automobile Financing Sector and CRISIL upgraded our ratings to ‘A’. Moving forward, our continued focus on technology, diversified product portfolio, innovative solutions to reach our customers with our products and solutions, will not only enhance productivity, but also delight our customers while retaining strong investor sentiment.”

Commenting on digitalisation plans, in particular, Madhu Alexiouse said, “Digitalisation is a key area of focus for the entire group. We launched our customer app, Mpower, in our AGM’18, and we received an extremely positive feedback in the past year with more than 65,000 downloads since its launch. This showcases the country’s increasing appetite for adopting technology and we will continue to innovate and make our products and solutions more accessible to our customers through technology.”