Muthoot Microfin Ltd reported a 262.9% year-on-year increase in net profit to ₹110.8 crore for the second quarter of FY27, marking the first time its quarterly profit has crossed the ₹100 crore mark.
The company's total income rose 26.9% to ₹732.9 crore during the July-September quarter, while pre-provision operating profit (PPOP) increased 67.4% to ₹249.4 crore.
The results reflect growth in lending operations, a shift towards a more diversified loan portfolio and improvements in asset quality.
Muthoot Microfin disbursed loans worth ₹2,900 crore during the quarter, up 27.5% from the corresponding period last year.
Its gross loan portfolio (GLP), or assets under management (AUM), increased 22% to ₹15,323 crore.
The company has been expanding beyond its traditional joint liability group (JLG) lending model. Non-JLG loans now account for 31% of its total portfolio, indicating a gradual shift towards other lending segments.
Micro and small enterprise loans stood at ₹4,164 crore, representing 27% of the gross loan portfolio, while gold loans accounted for ₹453 crore.
The company's gross non-performing assets (GNPA) ratio declined by 123 basis points to 3.38%, while its net NPA ratio stood at 1.05%. Collection efficiency improved to 98.1%, pointing to stronger repayment performance among borrowers.
Muthoot Microfin also reported a reduction in its average cost of borrowing to 9.93%, helped by improved credit ratings. The company currently serves 32.7 lakh active customers through a network of 1,675 branches across India.
CareEdge Global Ratings has upgraded the company's rating outlook to 'Positive', reflecting an improvement in its credit profile.
Thomas Muthoot, Chairman and Non-Executive Director of Muthoot Microfin, said the microfinance sector was evolving beyond conventional lending to play a wider role in supporting livelihoods and entrepreneurship.
He highlighted the company's progress in expanding its non-JLG portfolio, which now accounts for nearly a third of its AUM.
CEO Sadaf Sayeed attributed the quarterly performance to growth across lending operations, improved asset quality and higher profitability.
According to Sayeed, the company's diversified product portfolio is helping it build a more resilient lending business and manage risks arising from changes in the broader economic environment.