Muthoot Capital Services Ltd Q2FY26 Concall Decoded: From Wheel Loans to Wheel Deals 🛵📈

1. Opening Hook

Muthoot Capital just pulled off a comeback more dramatic than a Malayalam movie climax — from losses in Q1 to profits in Q2. The CEO called it a “mixed bag,” which in corporate language means“we didn’t crash, but we can’t flex either.”

Blame the monsoons, floods, and sluggish two-wheeler sales. Yet, somehow, the Kochi crew managed to polish their credit policies, digitize collections, and still squeeze out profits.

This isn’t your typical NBFC story — it’s a tale of how a two-wheeler financier is trying to reinvent itself as a data-driven lending tech house. Stick around — the punchlines get sharper when the CFO starts talking yields and “bamboo growth.” 🌱

2. At a Glance

Disbursements ₹521 Cr (↓16% QoQ):Monsoon drowned more bikes than dealers sold.
AUM ₹3,284 Cr (↑40% YoY):Someone’s balance sheet is getting buff.
PAT ₹3.3 Cr:Small profit, but at least it’s not another “loss with learnings” quarter.
GNPA 6.46% | NNPA 3.07%:Still higher than ideal—collections working overtime.
PCR 60%:A solid buffer, or as the CFO says, “comfort provisioning.”
Yield ↑ to 20.3%:Risk-based pricing — or as they call it, “charge the brave more.”
Credit cost ↓ to 2.05% (vs 3.4% in Q1):Finally some brake on slippages.
CRAR 22.02%:Strong enough to skip fresh capital for now.
Rating Outlook Raised to Positive:CRISIL liked the new math.

3. Management’s Key Commentary

“We reversed the Q1 loss and got back to profits.”(Translation: The bleeding stopped, but don’t ask for marathon running yet.)

“Monsoon rains and floods affected sales in North and East India.”(Translation: God took a short position in our disbursements.)

“We reduced slippages by 6% and improved NPA recoveries by 69%.”(Translation: Collectors got incentive charts instead of lunch breaks.)😏

“We categorized locations A–E; E means no business at all.”(Translation: We ghosted bad geographies faster than a dating app.)

“eNACH penetration rose to 92%.”(Translation: Customers now pay digitally before even realizing it.)

“Q3 could see disbursements of ₹800–1,100 Cr.”(Translation: If Diwali gods bless us, we’ll ride the sales scooter again.)

“Our AUM crossed ₹3,200 Cr; aiming ₹4,000 Cr by FY26-end.”(Translation: The Excel target is in bold — make it happen or explain why not.)

“We’re building a data lake with EY.”(Translation: Because even NBFCs now want to sound like tech startups.)

4. Numbers Decoded

Metric	Q2 FY26	YoY / QoQ Change	One-Line Analysis
Disbursements	₹521 Cr	↓16% QoQ	Blame rain, not retail.
AUM	₹3,284 Cr	↑40% YoY	Growth faster than Hero’s ad spend.
PAT	₹3.3 Cr	Positive vs loss in Q1	Profit finally found GPS.
GNPA / NNPA	6.46% / 3.07%	Flat QoQ	Still high, but stabilizing.
Credit Cost	2.05%	↓140 bps QoQ	CFO breathing easier.
Yield	20.3%	↑70 bps QoQ	Risk-based pricing = spicy margins.
PCR	60%	Stable	Enough buffer to call it “cautiously optimistic.”
CRAR	22.02%	+100 bps QoQ	Capital cushion stronger than chai in Kerala.
Debt-to-Equity	4.56x	Flat	Leveraged, but not reckless.

Summary:Solid improvement, but still walking the fine line between growth and quality.

5. Analyst Questions

Q:Why are you cutting co-lending partners?A:“Low yield, high headache.”(Translation: Partners weren’t paying enough for our risk.)

Q:Expect yield uptick next quarter?A:“100 bps minimum.”(Translation: Pricing just got premium, like your OTT plan.)

Q:When will used 2-wheeler loans start?A:“November–December.”(Translation: A delayed Diwali launch, but we’ll sell it anyway.)

Q:Why is opex still high?A:“Incentives and agency recoveries.”(Translation: Paying people more to get our own money back.)

Q:What’s the 4% ROA dream?A:“We’ll get there by 2028, bamboo style.”(Translation: Nothing visible yet, but roots are deep.)🌿

6. Guidance & Outlook

Management

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