All right, let's move on and talk about results.
And Muthoot Finance is in focus,
full of the stock price.
The stock has recovered sparkly from the day's low.
Alexander George Muthoot, Joint MD at Muthoot Finance is now
joining us to talk more about numbers.
Alex,
you know, wishing you the best for Independence Day.
Great. You know, so lovely to be talking to you
today.
You're doing your own good contribution in nation building by
ensuring that the
you know the the deserving
in the among our citizens actually get productive loans.
Let's talk by understanding about how the quarter went by
good
30% closer to 28% is what your assets under management
grown.
I want to understand would you be able to
sustain this growth for the full year?
This is the first quarter because many of
your peers and in the ecosystem are moderating their growth
consciously as to ensure that there are no pressures coming
in,
in any part of the on the asset quality.
Are you comfortable this at this growth and will you
be able to sustain it?
OK, Thank you so much and wishing you also very
happy Independence Day.
As you know, we've started this financial year on a
good note.
We've had a
28% Y&Y increase at 98,000 and 48 crores of consolidated
AUM.
Our core business on gold loans,
our stand alone AUM has increased by
25% Y&Y at
84,324 crores. Our profit after tax has also been the
highest ever.
It's been historic 14% increase at
1196 crores. Our focus remains on our gold financing business,
which has done really well.
We have scaled up our
contributions per branch. Our branch productivity levels have increased.
That's true. A lot of sustained initiatives that we've done
and it's as you know,
gold is a very liquid asset.
It's a very strong asset.
So we we maintain that
corporate governance standards to ensure that we remain focused on
our core business and growing that core business.
So we're we at this stage would not like to
give a guidance,
a revision in the guidance.
We have already given a guidance of about 15%
for the financial year. We will revisit this guidance at
the end of quarter 2.
The Board will come together and take a decision to
whether to revise this guidance all right now.
So it will be too early for me to speak
about what the guidance will look like in the coming
quarters.
But yes, we have started on a good note.
Quarter one has been a historic quarter,
the best ever in the history of this company both
on the terms of the growth as well as the
profitability,
Right, Alex, good afternoon. This is Vinny joining in the
conversation as well.
While obviously you know you've started on a good footing,
I want to understand overall,
you know is there higher demand for gold loan right
now given that you know you're seeing some bit of
a stress coming in on that unsecured loan site,
some of the other smaller NBFC size,
they are facing a bit of an issue.
So how is that shaping up?
What is the scenario for Muthuta and in terms of
the benefit that you're seeing from here on also?
So Mutur Finance has always been a category leader in
gold financing business.
So our focus towards a new customer acquisition through a
lot of sustained marketing initiatives,
opening up the category, opening up the mindset of people
to look at this as a very smart way of
taking financing.
And we truly bring financial inclusion to the core,
of course, the length and breadth of this country.
Almost 65% of our branches are in the semi urban,
rural areas of the country.
We service more than two and a half lakh customers
every single day.
So our focus on our core product has always been
to grow market share,
increase new customer penetration. And I'm happy to say that
this quarter has been the highest ever in terms of
gold loan disbursement to new customers,
which is at
5651 crores. This has also been our highest ever gold
on disbursement in any quarter in the history of the
company at
73,648 crores. So like I said,
this is through very sustained initiatives that we take in
terms of market expansion,
increasing our market share and growing the core business of
ours,
which we are very well tuned to do.
And we have a very good set of operational efficiency
that we have built in with all our regional offices,
zonal offices and the branch network penetration we have in
various different markets.
We've been opening new branches also.
So I think it's it's has come together and like
I said,
the marketing initiatives also that we do to acquire newer
set of customers has also
I mean reaped the benefit for the organization and that
is clear to see with our results that we've started
off
on this on this body one this quarter.
So like I said, our focus has never been distracted,
whether whether it's there, if there's competition or no competition,
we have been always focused on maintaining our category leadership,
maintaining our customer centricity in our business,
ensuring that our customers get the best products from
us, from a very trusted brand.
You would all be aware that in Mutu Finance has
been not just as India's number one most trusted financial
services brand for the past eight years in a row.
And this business works on that trust.
So customers, if they're coming over and over again to
us,
the customers is because of that trust that we've been
able to maintain.
Clearly, it's like, you know,
it's like a synonym for gold loan.
Mutu gold loan is like yeah,
so brand is pretty strong,
but I want to come back on that growth.
28% growth is good. You will always out to form
your growth that is good.
But this time asset quality
sequentially has come under pressure.
That is the main point.
Is it only a one off kind of step up
in your asset quality pressures and normalize in rest of
the year?
What are the reason behind it?
It's come close to 4%
now. OK. So as you all aware,
we have moved to the NDS since
2018 and we have to make some ECL provisions.
So the stage one and stage two asset we made
a provision of about 81 crores and in stage 3
NP assets,
we have made a provision about
130 crores. But as you all know,
our product goal financing is a one year product.
After one years and 90 days post that it becomes
an NPA.
But on that NPA portfolio,
our LTV loan to value ratio is only about
54% right now. So it is
in a very comfortable zone.
We always believe in customer centricity.
We do not want to option gold and use that
as a strategy to bring down NPS because gold being
such a liquid asset,
we can easily do options and bring down our NPS
drastically.
But we don't look at that.
We always look at very customer centric approach.
We look at renewing and retaining this relationship with us.
So we always give our borrowers some extra bit of
time to
repay us and that is when these goes into a
provision,
an ACL provision in the Stage 3 assets.
But like I said, the NPA portfolio as such has
LTV of only
54%. And as you know,
the regulators have given us an LTV pushing to about
75%. But this kind of portfolio is not a concern
for us.
We are in a very,
I think a very comfortable zone.
But like I said, we would rather maintain a long
term strategy to build that customer centricity and ensure that
we retain and renew our relationships with our customers.
Alex, what I want to understand also just in terms
of your names,
right, they've remained largely flattish is what we could say
versus last quarter.
This time the reason mainly was I think the highest
slippages that came in
for the rest of the year.
How should one be looking at the names?
What is it that we're watching out for?
11 point, 511.6% is where it should remain.
Yeah. So if you look at our quarter of last
year June,
we had a name of about
11.58%. Right now our name and quarter one of this
financial is only
11.5 or five 1%. So it's a very marginal dip.
We would like to maintain it around this ratio 11
to around 12%.
I think that is a very comfortable zone for us.
And I think we are at this
particular percentage, we are very comfortable and we have we've
not seen a very drastic change to this or anything
of concern as such.
So we're comfortable maintaining it at this level.
All right, Alex, we'll let you go on that one.
Thanks so much for joining us
on the show. Thank you so much.
Thank you. So that was an accounting,
you know, you know Norm because of which the asset
quality at the stage 3 ones actually looking elevated,
but not actually asset quality pressure.
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