Muthoot Microfin Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Muthoot Microfin Ltd filed with BSE on 13 May 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Muthoot Microfin unveiled Vision 3030, targeting INR30,000 crores AUM by 2030 through diversification from a JLG-only model to individual loans, gold loans and LAP. For FY26, the company reported AUM of INR14,005 crores, a Q4 profit of INR71 crores, and improvements in collection efficiency, GNPA and cost of funds compared to the prior year. Management discussed underwriting technology, funding diversification, and answered analyst questions on yields, credit cost, leverage, and geographic strategy.
Numbers mentioned
AUM: INR14,005 crores (FY26)
p. 16
“we are closing the financial year with around INR14, 005 crores of portfolio under management, which is a 13% growth year-on-year”
Praveen T, page 16 of the filed PDF · View the filing
Q4 disbursements: INR2,876 crores (Q4 FY26)
p. 16
“if you look at Q4, we have disbursed around INR2,876 crores, which is almost 46% growth year-on-year and 15% growth quarter-on-quarter”
Praveen T, page 16 of the filed PDF · View the filing
Collection efficiency: 96.43% (Q4 FY26)
p. 16
“Currently, we are at 96.43%. That is a growth of almost 160 basis points from quarter-on-quarter and almost 340 basis points improvement from year on year”
Praveen T, page 16 of the filed PDF · View the filing
GNPA: 3.89% (FY26)
p. 16
“It has come down to 3.89% from 4.85% in in the previous year, as well as the net NPA stands at 1.14%”
Praveen T, page 16 of the filed PDF · View the filing
Q4 profit: INR71 crores (Q4 FY26)
p. 16
“we have reported a INR71 crores profit, which is highest profit that we have reporting in last seven consecutive quarters”
Praveen T, page 16 of the filed PDF · View the filing
NIM: 12% (Q4 FY26)
p. 17
“We are at 12% NIM standalone Q4 of the current financial year.”
Praveen T, page 17 of the filed PDF · View the filing
Opex: 6.4% (Q4 FY26)
p. 17
“So we have currently 6.4% opex in Q4 of the current financial year.”
Praveen T, page 17 of the filed PDF · View the filing
Credit cost: 3.5% (FY26)
p. 17
“we are at 2.8% in Q4 and for the full year we are at 3.5%”
Praveen T, page 17 of the filed PDF · View the filing
ROA: 2.1% (Q4 FY26)
p. 17
“we have reported a 2.1% ROA standalone Q4 and 10% ROE for the quarter”
Praveen T, page 17 of the filed PDF · View the filing
Full year profit: INR170 crores (FY26)
p. 17
“the overall profit for the full year is INR170 crores”
Praveen T, page 17 of the filed PDF · View the filing
Net worth: INR2,854 crores (FY26)
p. 17
“overall net worth stands at INR2,854 crores”
Praveen T, page 17 of the filed PDF · View the filing
Debt-equity ratio: 3.34 times (FY26)
p. 17
“if you look at the debt-equity ratio, we are at 3.34 times”
Praveen T, page 17 of the filed PDF · View the filing
Cost of funds: 10.27% (FY26)
p. 17
“We were at 11% in the previous year. Currently, we are at 10.27%.”
Praveen T, page 17 of the filed PDF · View the filing
Prior year loss: INR222 crores (FY25)
p. 16
“We had a loss of INR222 crores, and there is an elevated NPA and credit cost as well.”
Praveen T, page 16 of the filed PDF · View the filing
Individual loan portfolio: around INR2,387 crores
p. 5
“Our small and micro-enterprise individual loan portfolio grew to around INR2,387 crores with near-zero delinquency.”
Thomas John Muthoot, page 5 of the filed PDF · View the filing
Debt raised: INR9,537 crores (FY26)
p. 18
“In last financial year, we have borrowed almost INR9,537 crores, and that too in a very difficult market.”
Praveen T, page 18 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
AUM — INR30,000 crores · by 2030
stated as an aspiration by Sadaf Sayeed
p. 8
“we are talking about a INR30,000 crores AUM by 2030 and consistently delivering a ROA of 5% and above, ROE of 20% and above, and touching 10 million lives by 2030”
Sadaf Sayeed, page 8 of the filed PDF · View the filing
ROA — 5% and above · by 2030
stated as an aspiration by Sadaf Sayeed
p. 8
“consistently delivering a ROA of 5% and above, ROE of 20% and above, and touching 10 million lives by 2030”
Sadaf Sayeed, page 8 of the filed PDF · View the filing
FY27 AUM growth — 12% to 15% · FY27
stated firmly by Varun Dubey
p. 30
“Yesterday in your presentation, your AUM growth for FY27 was 12% to 15%.”
Varun Dubey, page 30 of the filed PDF · View the filing
Long-run credit cost — around 2.5% · long-run
stated as an aspiration by Sadaf Sayeed
p. 30
“We believe that on a long-run basis, we would be having a credit cost of around 2.5%, and that is what we feel that we can sustain.”
Sadaf Sayeed, page 30 of the filed PDF · View the filing
Net profit — INR1,000 crores · FY30
stated as an aspiration by Varun Dubey
p. 31
“The INR1,000 crores profit, is that the number for FY30?”
Varun Dubey, page 31 of the filed PDF · View the filing
Portfolio yield — above 22% to 23%
stated as an aspiration by Sadaf Sayeed
p. 33
“Currently, it is 18.8%, it is likely to go above 22% to 23%.”
Sadaf Sayeed, page 33 of the filed PDF · View the filing
NIM — 13.5% to 14%
stated as an aspiration by Sadaf Sayeed
p. 33
“We are already at 12% NIM, we are looking at 13.5% to 14% NIM expanding.”
Sadaf Sayeed, page 33 of the filed PDF · View the filing
Operating cost — 5% and below · by 2030
stated as an aspiration by Sadaf Sayeed
p. 33
“Right now, we are at around 6.4% operating cost, we are likely to be 5% and below by 2030 in terms of our, sorry, operating cost.”
Sadaf Sayeed, page 33 of the filed PDF · View the filing
Non-JLG collection share — 75% of collections digital · by 2030
stated as an aspiration by Sadaf Sayeed
p. 9
“Today, we stand at around incrementally 40% of our collection is digital. By 2030, 75% would be entirely digital.”
Sadaf Sayeed, page 9 of the filed PDF · View the filing
NCD/ECB share of borrowing — 40% · by 2030
stated as an aspiration by Praveen T
p. 18
“So the NCD, ECB, which was contributing 18% in last financial year, currently contributing almost 22%. And what we are trying to build is that going forward, we wanted to bring this 22% by 2030 to almost 40%.”
Praveen T, page 18 of the filed PDF · View the filing
Leverage — around four times
stated firmly by Praveen T
p. 46
“Around four times leverage is what the company is comfortable at a balance sheet level. So we'll be looking at four times leverage.”
Praveen T, page 46 of the filed PDF · View the filing
AUM growth CAGR — around 20% · through 2030
stated firmly by Sadaf Sayeed
p. 47
“we are looking at a 20% growth and also, we have grown in terms of our balance sheet.”
Sadaf Sayeed, page 47 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said last year's guidance was outperformed on most parameters and expressed confidence in achieving the higher growth rate through diversification from FY28 onward.
Answered by Sadaf Sayeed
Asked by Varun Dubey: How can the company achieve a 21% CAGR to reach INR30,000 crores AUM when FY27 guidance is only 12-15%?
p. 30
“We believe that we will definitely be able to achieve more than 15% growth rate.”
Sadaf Sayeed, page 30 of the filed PDF · View the filing
Management said diversification into gold loans, LAP and individual loans deepens household engagement and should improve overall asset quality and reduce credit cost cyclicality.
Answered by Sadaf Sayeed
Asked by Varun Dubey: Does diversification shield the company from the microfinance credit cycle?
p. 30
“We believe that on a long-run basis, we would be having a credit cost of around 2.5%, and that is what we feel that we can sustain.”
Sadaf Sayeed, page 30 of the filed PDF · View the filing
Management described a human-in-the-loop model using aggregator data, credit bureau checks, internal scorecards and generative AI to assist field officers.
Answered by Sadaf Sayeed
Asked by Anil Tulsiram: How does the company reduce reliance on talented employees for underwriting given attrition and informal income challenges?
p. 31
“We have integrated aggregator platform, so it gives us information on the customer on all the bank accounts at a click of a button that is available before the underwriting.”
Sadaf Sayeed, page 31 of the filed PDF · View the filing
Management explained it uses a hybrid model where field-level PD data feeds a centralized team that confirms loan eligibility ranges.
Answered by Sadaf Sayeed
Asked by Anil Tulsiram: Why is credit officer underwriting decentralized rather than centralized like some peers?
p. 32
“So it's a centralized plus decentralized approach.”
Sadaf Sayeed, page 32 of the filed PDF · View the filing
Management outlined NIM expansion to 13.5-14%, opex declining to 5% or below, and lower credit costs, targeted for 2030 onward.
Answered by Sadaf Sayeed
Asked by Aditya Mundra: What NIM, opex, credit cost and leverage assumptions underlie the 5% ROA and 20%+ ROE targets, and by when?
p. 33
“So overall, that will help us achieve 5% ROA.”
Sadaf Sayeed, page 33 of the filed PDF · View the filing
Management said branch closures are a calibrated, profitability-driven exercise while new branches are opened in newer geographies.
Answered by Sadaf Sayeed
Asked by Kaushal Attal: How long will branch rationalization continue?
p. 36
“So in the process, we had identified around 91 branches and we have merged them or rationalized them.”
Sadaf Sayeed, page 36 of the filed PDF · View the filing
Management said the scheme is capped at INR300 crores and offers limited benefit to larger MFIs, mainly aiming to restart public sector bank lending to the sector.
Answered by Praveen T
Asked by Kaushal Attal: Does the new government credit guarantee scheme (CGS) benefit the company's cost of funds?
p. 37
“So effectively, it is not yielding much benefit to the larger MFIs.”
Praveen T, page 37 of the filed PDF · View the filing
Management explained that recent yield increases are prospective and their benefit will show up as older, lower-yield loans roll off the book in FY27.
Answered by Praveen T
Asked by Ishank Gupta: How will NIM increase to 13% if new-product yields are similar to current lending rates?
p. 39
“So when we had some rate pressure in various talk about increasing in the interest rate, etcetera, in 2024, we have reduced the lending rate multiple times.”
Praveen T, page 39 of the filed PDF · View the filing
Management said yield improves because defaulting portfolio shrinks and asset quality improves through better underwriting and wallet-share consolidation rather than purely raising rates.
Answered by Sadaf Sayeed
Asked by Ronak: Why would credit cost fall even as yields rise, given higher yields typically imply higher risk pricing?
p. 42
“The yield is increasing because our portfolio that we have originated now is of course at a higher yield, but at the same time, the defaulting portfolio which was earlier there, which was a part of the denominator, that goes down”
Sadaf Sayeed, page 42 of the filed PDF · View the filing
Management said JLG rejection rates have risen to around 60% overall and higher in some states, and the company targets around four times leverage.
Answered by Udeesh Ullas
Asked by Sagar: What is the current loan rejection rate under MFIN guardrails, and what leverage is targeted for 5% ROA?
p. 45
“So right now, we are on the JLG. We are having a rejection rate of RSI of 60% collectively, but in certain markets, for example, if you go to Karnataka market, the rejection rate is as high as of 65%.”
Udeesh Ullas, page 45 of the filed PDF · View the filing
Management said the lower growth target reflects a deliberate focus on qualitative, sustainable growth given the larger current asset base, rather than a purely regulatory constraint.
Answered by Sadaf Sayeed
Asked by Chintan: Why is the growth guidance around 20% CAGR when past growth exceeded 25%?
p. 47
“So we are looking at a 20% growth and also, we have grown in terms of our balance sheet.”
Sadaf Sayeed, page 47 of the filed PDF · View the filing
Risks flagged
Global geopolitical tensions such as the Middle East conflict can affect oil prices, inflation, currencies and investor sentiment
p. 3
“The ongoing conflict in the Middle East serves as a stark reminder that geopolitical tensions can rapidly influence oil prices, inflation, currencies, supply chains, and investor sentiment.”
Thomas John Muthoot, page 3 of the filed PDF · View the filing
Interest rate risk from potential policy rate increases
p. 7
“The anticipation is for the next six months the rates might not change much, but the only thing, the risk is that it can increase a little bit.”
Sadaf Sayeed, page 7 of the filed PDF · View the filing
Fiscal deficit outlook could affect global investor sentiment on the Indian economy
p. 7
“But your biggest risk is your fiscal deficit as it plays out, what would be the outlook of global investors on the economy.”
Sadaf Sayeed, page 7 of the filed PDF · View the filing
Temporary disruptions from legislative developments in Bihar affecting operations
p. 5
“notwithstanding temporary disruptions in select states such as Bihar, where legislative developments proved inconsequential”
Thomas John Muthoot, page 5 of the filed PDF · View the filing
Climate risk from natural calamities affecting borrower repayment capacity
p. 11
“We are also addressing the climate risk. We are trying to build a climate-resilient portfolio.”
Sadaf Sayeed, page 11 of the filed PDF · View the filing
Customer over-leverage and vulnerability to income shocks affecting repayment discipline
p. 41
“So when the income is limited and the necessities are now costing more, so they spend towards that and they compromise on the repayment”
Sadaf Sayeed, page 41 of the filed PDF · View the filing
Rumours or local political narratives encouraging borrowers not to repay loans
p. 44
“the Bureau damage these customers make by following some rumour that this need not be paid.”
Thomas John Muthoot, page 44 of the filed PDF · View the filing
Overcrowding in MSME and LAP lending by other MFI players could pressure yields
p. 40
“So won't this overcrowding put a pressure on the yields because of higher competition?”
Ishank Gupta, page 40 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.