Muthoot Finance Q2 FY27 Results (NSE: MUTHOOTFIN)
Signal: Earnings grew
The read
The trajectory remains expansionary, with Q2FY27 total income at ₹88419.22 million, +37.3% YoY, but earnings quality is becoming more credit-cost-sensitive: impairment rose 443.3% YoY to ₹5149.23 million and gross Stage III assets increased to 3.87% from 2.25% a year earlier, keeping PAT growth at +26.9%, below revenue growth.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹8,841.92 Cr | +37.3% | +16.3% |
| Net profit | ₹2,976.63 Cr | +26.9% | |
| EPS | ₹74.14 | +26.9% | |
| EBIT margin | 0 |
P&L walk
Standalone total income rose to ₹88419.22 million, +37.3% YoY and +16.3% QoQ, but impairment expense increased to ₹5149.23 million, +443.3% YoY, limiting PAT growth to ₹29766.29 million, +26.9% YoY.
Key positives
- Total income reached ₹88419.22 million, +37.3% YoY and +16.3% QoQ, extending the lending-growth trajectory.
- Operating margin improved to 77.75% from 75.91% a year earlier, while employee and other operating expenses grew slower than total income.
- PAT of ₹29766.29 million and EPS of ₹74.14 both grew 26.9% YoY, and EPS tracked PAT without dilution evidence.
- Capital adequacy remained at 19.81% despite outstanding debt reaching ₹1637792.11 million.
Key concerns
- Impairment expense increased 443.3% YoY to ₹5149.23 million, absorbing part of the benefit from higher operating income.
- Gross Stage III loan assets rose to 3.87% from 2.25% a year earlier, while net Stage III assets were 2.25%.
- Finance costs increased 45.5% YoY to ₹33646.38 million, faster than total-income growth of 37.3%.
- H1 operating cash flow was negative ₹218405.24 million against negative ₹177726.79 million in the prior-year period, reflecting the funding burden of loan-book expansion.
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