Muthoot Finance on Wednesday reported a 43% year-on-year rise in standalone net profit for the fourth quarter at Rs 1,508 crore, supported by strong growth in interest income amid surge in demand for gold loans.
Interest income for the country’s largest gold-loan NBFC rose 42% year-on-year to Rs 4,784 crore in Q4FY25, while total expenses increased at a faster pace of 44% to Rs 2,868 crore.
Standalone loan assets under management (AUM) crossed the Rs 1-lakh-crore milestone, reaching Rs 1,08,648 crore in FY25 compared to Rs 75,827 crore in FY24, marking a 43% year-on-year growth. Gold loan AUM rose by Rs. 30,077 crore in FY25.
George Alexander Muthoot, Managing Director, Muthoot Finance, said the company has set a gold loan growth guidance of 15% for the current fiscal.
“We have been giving a guidance of 15% year-on-year. Last year, we grew by 41% and this year we would like to stick to a conservative guidance of 15%,” Muthoot said during the company’s Q4FY25 earnings call. He added that the company will think of revising the guidance after the second quarter if need arises.
For the full year, standalone net profit rose 28% to Rs 5,201 crore, while interest income increased 36% to Rs 16,877 crore in FY25.
Muthoot also acknowledged the rising competition in the gold loan segment with more banks and NBFCs entering the space. “But the overall pie is also increasing because more and more people are using their ornaments to take gold loans,” he added.
At the consolidated level, however, net profit grew at a slower pace of 22% to Rs 1,444 crore in Q4FY25, weighed down by higher finance costs and impairment provisions. Consolidated interest income rose 37% year-on-year to Rs 5,466 crore, while total expenses climbed 43% to Rs 3,721 crore. This included a 46% rise in finance costs to Rs 2,111 crore and nearly double the impairment provisions at Rs 414 crore.
The consolidated performance includes Muthoot’s core gold loan business along with subsidiaries such as Muthoot Homefin, Belstar Microfinance, and Muthoot Insurance Brokers.
Muthoot said Belstar Microfinance posted a profit after tax of Rs 46 crore despite challenges in the microfinance sector, while its stage-3 assets stood at 4.98%, in line with peers.
On the RBI’s draft guidelines on gold lending, Muthoot said several lenders and industry associations have shared their suggestions with the regulator, and the impact will be clear only after the final rules are released.
Muthoot said the only concern the association of gold loan companies has raised with the regulator is that the proposed changes to the loan-to-value (LTV) ratio in the draft guidelines could disadvantage NBFCs and ultimately hurt customers. He noted that NBFCs brought a lot of customers from the unorganised sector to the organised sector in the last 20-30 years with a lot of effort.
“If the NBFCs are limited through tweaks in the LTV norms as suggested in the draft guidelines, it will take back these customers to unorganised moneylenders, which won’t be in the interest of the country,” he added.
“Gold prices have gone up by over 50% in the last one year. Quite a few players have started coming into this space, which has raised some regulatory concerns,” he said, adding that the positive aspect of the draft is its focus on harmonising NBFC practices. “Old gold loan NBFCs like us have already been following all that,” he added.
Consolidated profit after tax for FY25 rose 20% year-on-year to Rs 5,352 crore, while consolidated loan AUM grew 37% to Rs 1,22,181 crore as against Rs 89,079 crore in the previous year. Subsidiaries contributed Rs 15,763 crore to consolidated AUM during Q4FY25, a 15% rise from the year-ago period.
For FY24-25, the company declared its highest-ever dividend of 260% on the face value of Rs 10 per share, amounting to Rs 26 per equity share. At the group level, Muthoot added 850 new branches in FY25 and has received approval to open 115 more in the current year.
Shares of Muthoot Finance closed at Rs 2,266 on the NSE on Wednesday, up 2% from the previous day’s close.