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Muthoot Finance Ltd today reported a 28.1 per cent fall in net profit at Rs 194.24 crore for the third quarter ended December 31.
The gold financing company today reported net profit of Rs 270.07 crore in the year-ago period.
In the nine month period from April-December, the company registered a profit of Rs 599 crore against Rs 784 crore in the same period in the previous year, a dip of 24 per cent.
Commenting on the results, M G George Muthoot, Chairman, said the company was glad RBI had relaxed the LTV cap from 60 per cent to 75 per cent. He hoped this measure would enable Muthoot bring back its customers who moved to the unorganized sector in search of optimum value for their personal assets.
George Alexander Muthoot, Managing Director, said considering the fact that regulatory uncertainty has almost come to an end, the Company can devote more time to developmental activities.
"We have engaged the services of Mckinsey for advising us on improving the productivity in gold loan business. Though there has been a drop in the loan portfolio during the quarter, we hope relaxation of LTV cap to 75 per cent will enable us to bring back customers who moved to the unorganised sector.
"Company will be focusing on achieving the March 2013 loan portfolio level of Rs 26,000 crore in the next couple of quarters," he said.
Muthoot's strong presence in borrower segments like small and medium enterprises, agriculture sector, traders, road transport operators, etc, constituting more than 70 per cent of the loan portfolio, should be a strong enabler for achieving this target and take on further growth in the quarters to come, he said.
Borrowings cost continues to remain high and is becoming a stumbling block in reducing the lending rates. "We are negotiating with banks to rationalise its spreads over base rate for lending to such a high quality loan portfolio.
"As a prudent provisioning policy, company is maintaining a higher standard asset provisioning of 0.40 per cent against the regulatory requirement of 0.25 per cent," he told reporters.
Muthoot would roll out