Muthoot Microfin Q2 FY27 AUM Rises 22% YoY to ₹15,323 Crore; Cost of Funds Drops to 9.93%
Muthoot Microfin's AUM grew 22% YoY to ₹15,323 crore in Q2 FY27. Disbursements rose 28% YoY to ₹2,900 crore. Cost of funds dropped to 9.93%, a first in single digits. The company raised ₹3,213 crore in Q2, strengthening its funding.
The reported growth in AUM and disbursements, coupled with a reduction in cost of funds and improved asset quality, are material financial and operational developments that are likely to have a significant positive impact on the company's financial performance and investor sentiment.
The announcement highlights significant year-on-year growth in AUM and disbursements, a substantial improvement in asset quality and collection efficiency, and a notable reduction in the cost of funds entering single digits for the first time. Diversification of the loan portfolio and increased digital adoption also contribute positively.
Muthoot Microfin Limited has announced its key business update for the quarter ended September 30, 2026. The company reported a significant growth in its Assets under Management (AUM), which stood at ₹15,323 crore as of September 30, 2026. This represents a 22.0% year-on-year growth compared to September 30, 2025, and a 23.9% annualized quarter-on-quarter growth from June 30, 2026. The loan portfolio has shown increased diversification, with the JLG and Non-JLG mix improving to 69:31 from 83:17 as of March 31, 2026. The Small and Micro Enterprise Individual Loan (IL) portfolio grew to ₹4,164 crore, maintaining near-zero delinquency. During the quarter, the company disbursed gold loans under a referral and co-lending model with its parent company, Muthoot Fincorp Limited, disbursing ₹453 crore. Disbursements for Q2 FY27 reached ₹2,900 crore, marking a 28% YoY growth over Q2 FY26 and a 10% QoQ growth compared to Q1 FY27. Asset quality remained strong, with Collection Efficiency (CE) at 98.11% in Q2 FY27, an improvement of 477 basis points over Q2 FY26. The X-Bucket CE, excluding advances, stood at 99.9%. The company maintained robust liquidity with ₹1,701 crore and unavailed sanctioned credit lines of ₹4,328 crore. Funding sources were diversified, with ₹3,213 crore raised in Q2 and ₹5,946 crore for the half-year. Notably, the company's cost of funds declined to 9.93% during the quarter, entering single-digit territory for the first time, a reduction of 20 basis points from the previous quarter. Incremental cost of funds improved by 11 bps QoQ to 9.69%. As of September 30, 2026, Muthoot Microfin operated 1,675 branches, serving 32 lakh active customers. Digital initiatives showed traction, with the Mahila Mitra app downloads reaching 22 lakhs. Digital collections increased to 47% in Q2 FY27 from 25% in Q2 FY26. These figures are provisional and unaudited, subject to review by statutory auditors and approval by the Audit Committee and Board of Directors.
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