46% growth in hypothecation loan disbursement on a Year On Year basis
The Financial results of the Company for the quarter ended 30th June 2017 was approved by the Board of Directors of the Company in its meeting held at Kochi on 26th July 2017.
Muthoot Capital Services Limited (MCSL), the leading two-wheeler finance company and the first listed entity of the 130 -year-old Muthoot Pappachan Group, recorded a net profit of Rs 6.09 crores for the first quarter of 2017-18, registering an increase of 36% compared to the corresponding quarter last year. The Company has grown its AUM from Rs 1,090 crores as of 30th June 2016 to Rs 1,559 crores as on 30th June 2017, i.e. a growth of 43%, the current quarter.
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| Gaining immense mileage and reach, Muthoot Capital extended its penetration in the Southern markets |
The company disbursed 67,398 nos of 2 Wheeler loans amounting to Rs.340.56 crores during the quarter, compared to 48,566 nos of 2 Wheeler loans amounting to Rs.232.69 crores during the same quarter last year, thereby recording a growth of 46.4% during the quarter, compared to the corresponding quarter of the previous year.
The Company extended its penetration in the Southern markets and also aggressively pushed its disbursements in the North and East Indian market. From an erstwhile policy of growth in semi-urban and rural areas, the company has shifted its focus on to large towns/cities and in certain metros as well. The increased focus on the Top-Up Loans also helped in increasing the disbursement, AUM and Revenue.
The total loan portfolio of the company increased to Rs 1,559 crores (including the managed portfolio) at the end of the quarter as against Rs 1,090 crores as at the end of the first quarter last year, recording an increase of 43%. The company has 4,43,480 customers as at the end of the quarter, compared to 3,51,811 customers at the corresponding time last year.
For faster growth at lower costs, Muthoot Capital has moved away from the traditional methods of sourcing through own manpower by outsourcing the same but with a sound monitoring process. This has been done while retaining crucial credit appraisal, collection supervision and strategy within the company. The aim is to help spread faster in a controlled manner at lower costs. With volumes coming in from areas where the Company has spread last year and in the current quarter, the Company has been able to grow at a pace faster than the 2 Wheeler industry.
The company achieved a total income of Rs 79.76 crores for the quarter ended 30th June 2017 as against Rs 64.26 crores for the same period last year, a growth of 24.1%. Financial expenses increased from Rs 25.24 crores to Rs 28.11 crores during the corresponding period, recording an increase of 11.4%. Non-financial expenses increased from Rs 32.07 crores to Rs 42.25 crores, an increase of 31.7%.
The net profits stood at Rs 6.09 crores as against Rs 4.48 crores for the corresponding quarter in the previous year.
During the quarter the Company securitised its portfolio to the extent of Rs 88.51 crores and as of the end of the quarter had a total managed portfolio of Rs 245 crores.
Thomas George Muthoot, Managing Director, Muthoot Capital Services Limited, said: “We have been and continue to be a leading provider of two-wheeler finance in South India. Our aim is to emerge as a leading national player in the realm of two-wheeler loans, spreading our wings across the markets. New products are being looked at and would be done in the areas where the Company has a strong hold in the markets and keeping in mind the 2 wheeler customers. With aggressive emphasis on maximum utilisation of the Muthoot Fincorp branches for business sourcing activities, technology enabled processes and distribution spread across the country, we are hopeful that, over a period of time, we will be one of the premier financiers in this segment in India."
“The Company has been looking at cutting its cost and targeted substantial reduction in finance cost over the next 2-3 quarters. Banks have been supportive in this. Going forward with emphasis on other sources of funds including securitisation, NCDs and more aggressive push for Public Deposits, the Company will be in a position to cut its costs substantially. The Company during the quarter did its 5th securitisation transaction, which helped in increasing the availability of working funds at lower cost besides helping with better Capital Adequacy Ratio.”
Madhu Alexiouse, Chief Operating Officer of the company, stated: “During the quarter, we have been able to grow both Dealer as well as Branch Business. While the branch business grew by 22%, the Dealer counter business grew by 52%, basically driven by enhanced and wide-spread distribution. The North and East volumes at the Dealer Points have grown 7 fold over the same quarter last year indicating that in newer markets also Muthoot Capital brand is a force to reckon with. The technology driven sales process, especially launch of Mobile based application processing has led to faster TAT enhancing the productivity of the Counter Sales Executives, besides reducing manual intervention in the processes. We have an ambitious growth target in the coming years and technology would be the key driver to this growth. ”
“We have been devising new schemes regularly for meeting the challenges of the existing markets and new territories that we are entering into. During the quarter we entered into several metros in the country where we were not present hitherto. Operationally we expect higher use of technology in these locations besides having a tighter collection plan to keep the portfolio healthy. New launches are planned in several locations in Western India and major ramp up in disbursements can be seen in these locations.”
About Muthoot Capital Services Ltd
Muthoot Capital Services Ltd. (MCSL) is the first listed entity of Muthoot Pappachan Group. A Non-Banking Financial Company (NBFC) listed on the BSE and NSE, MCSL offers financial solutions including Vehicle Loans (2 wheeler loans). MCSL is presently active in retail financing and caters to the requirements of borrowers both in rural and semi-urban areas. The Company's direct approach helps arrive at solutions that best suit the financial requirements of individuals and small entrepreneurs. The Company being a deposit taking ‘Category A’ NBFC, also accepts deposits from public at attractive rates of interest. The company is currently servicing more than 2,200 dealerships in fifteen states and a strong presence with Hero and Honda, which together contribute more than 80% of the total business.
About Muthoot Pappachan Group
Muthoot Pappachan Group (MPG), the 130 year-old business conglomerate has been providing solutions, services and expertise to lakhs of customers across the country in various domains like financial services, automotive, realty, hospitality, IT and alternate energy. Over the years, Muthoot Pappachan Group has grown to become a significant entity in the Indian business landscape. Currently it has more than 20,000 employees, serving over a million customers through over 3,800 retail branches. MPG's customer-centric approach and innovation in terms of new products that cater to changing customer needs, have helped in gaining the loyalty of innumerable customers, as well as attracting new ones. The Group adopts the latest technology and new ways of catering to the needs of customers, coupled with an uncompromising stand on values, principles and ethics.
Muthoot Fincorp Ltd., the flagship company of Muthoot Pappachan Group, is one of the largest NBFCs in India and is registered with the Reserve Bank of India. Muthoot Fincorp is a provider of retail finance, predominantly in the form of gold loans. Decades of dedicated research and experience in rural areas have enabled the Company to provide quick and customized financing options and investment schemes for millions of customers who do not have access to mainstream commercial banks. Muthoot Fincorp is one amongst the largest Gold Loan companies in India and has an average of 60,000 walk-in customers per day. The Company has a diverse mix of retail offerings catering to the various needs of its customers including MSME Loan products, Money Transfer, Foreign Exchange, Insurance Services and Wealth Management Services.
Five years ago, the Group entered the affordable housing finance arena through Muthoot Housing Finance Company Ltd (MHFCL), a subsidiary of Muthoot Fincorp Ltd. MHFCL caters mainly to the housing finance requirements of customers in the middle and lower income category. The Company offers housing loan, primarily to the people in the unorganised sector to make their dream of owning a home come true. Loan amounts range from Rs.3 lakhs to Rs.15 lakhs, with a loan repayment period up to 15 years and a loan-to-property value of up to 80%. MHFCL offers loans for the purchase of ready property, house/flats under-construction, self-construction on own plot and home extension for the informal segment, who has got income but no proof of income.
The Muthoot Pappachan Group firmly believes that financial inclusion of the economically weaker section of society is important for the socio-economic growth of the country. With this belief Muthoot Microfin Ltd., the micro finance business unit was launched by the Group in 2015. It follows the Joint Liability Group (JLG) model of micro-finance. Clients are organized in groups of five to ten women from economically weaker sections of society, living in rural and semi- urban areas or urban slums. Target clients are economically active women with regular cash flow through lawful, sustainable and stable economic activity. Under this program, each individual in a JLG is offered a loan between Rs.10,000 to Rs. 15,000 depending on her repayment capacity, for a tenure of 52 weeks. It also fosters entrepreneurship skills among women and gives them basic financial literacy.
The Group has contributed to the tourist attractions of Kerala by setting up star hotels run by the Taj and Hilton Groups, Villa Maya, the exclusive restaurant and Sky Chef, the air catering unit, while contribution to safe and clean energy comes in the form of electricity through wind farms and to technology through the state of the art Muthoot Technopolis.
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