Muthoot Finance Q3 profit jumps 61%

The Kerala-based gold financing company, Muthoot Finance Ltd has registered a 61 per cent growth in its net profit to touch Rs 251crore for the quarter ended December 31, 2011, against Rs 155 crore in the corresponding period of the previous fiscal. The figures for nine months ended December 31 stood at Rs 657crore (Rs 355 crore).

The total income for Q3 stood at Rs 1,231crore (Rs 645crore), a growth of 91 per cent.

The retail loan assets under management increased by Rs 1,944 crore to Rs 22,885crore. The company has got a branch network of 3,480 spread across 21 States and four Union Territories.

Employee stock option

Announcing the results, Mr M. G. George Muthoot, Chairman, Muthoot Finance Ltd, said that the board of directors has also constituted a committee of directors to approve and finalise terms for instituting an employee stock option plan to the employees.

He said that the quarter gone by witnessed significant changes in the operating environment of the company. Significant gyrations in gold price and increase in cost of borrowing being the most significant ones.

Thanks to the robust risk management practices and efficient management of funding and operating costs, he said the company has been able to achieve 61 per cent increase in profit against a 2.58 per cent rise in borrowing cost and the Net Interest Margin reducing by 0.43 per cent.

Concurrent with the steep rise and fall in gold prices, the risk management practices were streamlined, enabling the company to exercise strict control over the loan to asset value.

The robust product demand enabled 91 per cent growth in top-line and this coupled with geographic expansion continue to be the drivers of loan growth, he added.

sajeevkumar@thehindu.co.in