1. Opening Hook
Remember when microfinance firms used to chase collections with ledgers and loudspeakers? Muthoot Microfin now does it with dashboards and data. The company’s Q2FY26 was less about lending money and more about lending confidence — to itself and the Street.
From CRISIL upgrades to new products (Gold, LAP, Individual Loans), the team sounded like they’d just finished a fintech bootcamp. Even floods couldn’t dampen their optimism — because apparently, even the monsoon took an EMI holiday.
But don’t scroll past — this one’s got collection miracles, algorithmic lending, and a customer named Elizabeth who became the poster child of financial inclusion. 🪙
2. At a Glance
- AUM ₹12,558 Cr– Up 10% QoQ; clearly, small loans, big compounding.
- Disbursements up 28%– Growth so fast, even CRISIL took notice.
- Net Profit ₹30.5 Cr– From ₹6 Cr last quarter; caffeine shot to the bottom line.
- Credit Cost down to 3.6%– From 9.4% a year ago; risk finally on a diet.
- GNPAs at 4.61%– Still not showroom-clean, but getting there.
- Net NPA 1.41%– Low, like investor expectations in 2023.
- ROA 1.8% (with OCI)– Nearly at target; next stop, 2% bragging rights.
3. Management’s Key Commentary
“Operational challenges are subsiding; business is normalizing.”(Translation: The panic phase is over, the PowerPoint phase has begun.)
“CRISIL upgraded our outlook from Stable to Positive.”(A rare Indian rating upgrade that didn’t involve cricket scores.)
“Credit cost dropped to 3.6% — from 9.4% last year.”(That’s not a typo, that’s therapy working! 😏)
“We’re focusing on meaningful financial inclusion.”(Buzzword bingo: achieved.)
“Individual Loan book ₹468 Cr — zero delinquency so far.”(Early days, but management’s already framing the certificate.)
“Gold Loans and LAP are picking up well.”(Microfinance meets Muthoot DNA — it was inevitable.)
“We’ve built our own credit score model to save ₹2 Cr annually.”(Goodbye Equifax, hello Excel-powered patriotism.)
“We’ll overachieve on guidance.”(Translation: We’ve already told CRISIL, so now we have to.)
4. Numbers Decoded
| Metric | Q2FY26 | Q1FY26 | QoQ | Commentary |
|---|---|---|---|---|
| AUM | ₹12,558 Cr | ₹11,417 Cr | +10% | Collections + Disbursements = Cheers |
| Disbursement | ₹2,274 Cr | ₹1,775 Cr | +28% | Micro became macro |
| Net Profit | ₹30.5 Cr | ₹6 Cr | +400% | Turnaround on turbo mode |
| GNPAs | 4.61% | 4.85% | ↓24 bps | Recovery in progress |
| Net NPAs | 1.41% | 1.58% | ↓17 bps | Cleaner book, cleaner sleep |
| Credit Cost | 3.6% | 4.3% | ↓70 bps | From chaos to control |
| NIM | 11.9% | 11.5% | ↑40 bps | Margins love discipline |
| Cost-to-Income | ~55% | 60% | ↓ | Slowly bending the curve |
| ROA | 1.8% (with OCI) | 0.4% | ↑ | Almost at target |
(When microfinance looks this macro, even auditors smile.)
5. Analyst Questions
Q:“What’s the breakup of Micro LAP and Gold Loans?”A:“Around ₹5 Cr — small, but shiny.”
Q:“Are banks more open to lending now?”A:“Yes, even SBI gave us ₹500 Cr PTC. Public banks are behaving private.”
Q:“Any stress in new products?”A:“None so far. Early days — we’ll let the NPAs know later.”
Q:“How much did the in-house credit model help?”A:“Saved ₹2 Cr. Also saved us from Equifax’s emails.”
Q:“Any more branch closures?”A:“84 branches being merged — cost saved, morale pending.”
Q:“Will credit cost improve further?”A:“Yes, because we’ve started believing in math again.”
6. Guidance &
