Muthoot Microfin Limited — PPTs, 06-02-2025: Investor Presentation

**Financial Highlights:**

For Q3 FY’25, Muthoot Microfin reported a total income of INR 6,815 Mn, marking a 17.67% increase year-over-year. The pre-provision operating profit (PPOP) was INR 2,523 Mn, reflecting a 39.6% growth YoY, while profit after tax (PAT) significantly declined by 96.95% YoY to INR 38 Mn due to elevated credit costs. Assets under Management (AUM) stood at INR 1,24,049 Mn, an 8.3% rise YoY but slightly down 0.9% QoQ. The net interest margin (NIM) improved to 13.26%, driven by a stable portfolio yield amidst reduced borrowing costs.

**Strategic Initiatives and Growth Drivers:**

Muthoot Microfin is actively pursuing a more selective customer acquisition strategy, leading to a healthier lending mix. The implementation of new lending guidelines has resulted in a cautious lending approach, with disbursements falling to INR 20,351 Mn from INR 26,738 Mn last quarter. The company has also reduced lending rates, further aiming to increase client retention and improve asset quality.

**Business Developments:**

The quarter saw an uptick in the branch network to 1,651 branches, while active client numbers reached 3.42 Mn. The successful execution of risk management strategies and the introduction of an efficient collection process have helped mitigate the impacts of recent economic pressures.

**Market Position and Competitive Advantage:**

Muthoot Microfin has solidified its market positioning, now holding an 11.49% market share in its operating regions, contesting industry challenges effectively. The ongoing evolution of digital tools and analytics enhances operational efficiencies, supporting customer engagement and retention.

**Investor Implications:**

Given the ongoing strategic shifts and robust performance metrics, Muthoot Microfin appears well-positioned for long-term growth despite current macroeconomic challenges. Investors might consider monitoring the company's trajectory closely, particularly as it navigates through adjustments in its lending strategies and credit environment.