Muthoot Microfin Ltd (NSE:MUTHOOTMF) Q3 2026 Earnings Call Highlights: Strong AUM Growth and …

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Tue, February 10, 2026 at 8:01 PM GMT+9 4 min read

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**Asset Under Management (AUM):** Reached 13,078 crores, a growth of 5.4% year-on-year and 4.1% quarter-on-quarter.

**Disbursements:** 2,492 crores in the last quarter, averaging around 850 crores per month.

**Individual Loan Portfolio:** Reached 1,097 crores with almost zero delinquency.

**Operating Expenses (OpEx):** Reduced from 7% to 6.5%.

**Cost to Income Ratio:** Improved to 54%, better than the guided 55%.

**Gross Non-Performing Assets (GNPA):** Reduced by 137 basis points year-on-year to 4.4%.

**Net Non-Performing Assets (NPA):** Improved by 7 basis points quarter-on-quarter.

**Credit Cost:** 3.7% for the nine-month period, 3.3% for the quarter.

**Collection Efficiency:** Improved by 150 basis points quarter-on-quarter to 94.8%.

**Return on Assets (ROA):** Reached 1.9% for the quarter.

**Profit After Tax (PAT):** 62 crores for the quarter, 99 crores for the nine months.

**Net Interest Margin:** Reached 12%.

**Income Growth:** Quarter-on-quarter growth of 4.8% to 605 crores.

**Pre-Provision Operating Profit (PPOP):** Grew by 17.7% to 175 crores quarter-on-quarter.

**Funding Raised:** 2,700 crores in the quarter at competitive rates.

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Release Date: February 10, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Muthoot Microfin Ltd (NSE:MUTHOOTMF) was recognized as the Financial Inclusion Institute of the Year and won an award for responsible finance for sustainability.

The company's asset under management grew by 5.4% year-on-year, reaching 13,078 crores.

Disbursements have normalized, with a significant increase to 850 crores per month, expected to reach 1,000 crores per month in the next quarter.

The individual loan portfolio, which is entirely digital, has shown zero delinquency and a low bounce rate of 9%.

Operating expenses have decreased from 7% to 6.5%, aided by branch rationalization and digital collection methods.

Negative Points

The company's unsecured portfolio remains high at 95%, which could pose risks in volatile markets.

Despite improvements, the gross non-performing assets (GNPA) are still at 4.4%, which is relatively high.

The cost of funds, although reduced, remains a concern at 10.4%, with incremental costs at 9.8%.

The company had to take a significant provision in the last financial year due to legislative impacts in Karnataka.

The yield on the portfolio is affected by the inclusion of non-performing assets, impacting overall profitability.

 






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Q & A Highlights

Q: What led to the substantial increase in net gain on fair value changes this quarter? A: Sadaf Sayeed, CEO: The increase is due to direct assignment income from transactions during the quarter. Additionally, improved recovery in overdue accounts has increased our EIS recovery, contributing to better yields.

Q: How is the change in borrowing mix affecting the cost of funds? A: Sadaf Sayeed, CEO: Our cost of funds has decreased from 11% last year to 10.43% currently, with incremental costs at 9.8%. We are focusing on PTC structures for better rates and plan to diversify further with ECBs and other instruments.

Q: Can you provide guidance on net interest margin and growth for the next financial year? A: Sadaf Sayeed, CEO: We aim to reach a net interest margin of 12.7% in the next 2-3 quarters. For growth, we expect to close this financial year at around 14,000 crores AUM and target a 20% growth next year, reaching approximately 17,000 crores.

Q: What structural changes have been made to ensure predictable credit costs over the next five years? A: Sadaf Sayeed, CEO: We have enhanced our underwriting process, using technology and AI for better customer evaluation. Our diversification strategy and improved risk management tools aim to maintain credit costs between 2-2.5% and ROA at 3-3.5% over the long term.

Q: What is the outlook for ROE and collection efficiency in the coming years? A: Sadaf Sayeed, CEO: We expect to achieve an ROA of 3-3.5% in the next 3-5 years, with an ROE of 14-18%. Collection efficiency has been improving, with significant recovery from overdue accounts, and we anticipate continued improvement in the coming quarters.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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