Muthoot Microfin Q3 FY26 Earnings Call Transcript Released
Muthoot Microfin's Q3 FY26 earnings call transcript reveals AUM growth to ₹13,078 crore and a 5.4% YoY increase. The company aims for ₹1,000 crore monthly disbursements in Q4 FY26. Operating expenses reduced to 6.5%, and GNPA stands at 4.4%. PAT for Q3 was ₹62 crore, with FY26 AUM projected at ₹14,000 crore and FY27 growth targeted at 20%.
The announcement provides a comprehensive update on the company's financial health, operational improvements, and future growth strategies, which are material for investors and stakeholders.
The announcement details positive financial performance, growth in AUM and disbursements, reduction in operating costs and NPAs, and improved collection efficiency. The company also received industry recognition and expressed confidence in future performance and turnaround.
Muthoot Microfin Limited has released the transcript of its investor conference call held on February 10, 2026, to discuss the unaudited financial results for the quarter ended December 31, 2025. The company reported significant achievements, including being recognized as the Financial Inclusion Institution of the Year and winning an award for Responsible Finance for Sustainability.
The Asset Under Management (AUM) reached ₹13,078 crore, a year-on-year growth of 5.4% and a quarter-on-quarter growth of 4.1%. Disbursements have normalized, with ₹2,492 crore disbursed in the last quarter and an expectation to reach ₹1,000 crore per month in Q4 FY26. The individual loan portfolio, 'Muthoot Small and Growing Businesses', has grown to ₹1,097 crore with near-zero delinquency and entirely digital collection.
The company has successfully diversified its portfolio mix, moving from 97% JLG and 3% non-JLG in March to 88% JLG and 12% non-JLG. The target is to reach an 85%-15% mix in the current financial year and a long-term goal of 65%-35%. Operating expenses (opex) have been reduced from 7% to 6.5% due to business scaling, cost optimization initiatives (rationalizing 66 branches), and the minimal collection cost for the digital individual loan portfolio. The cost-to-income ratio has improved to 54%, with a target of reaching the optimal 43% within 9-12 months.
Asset quality has shown significant improvement, with Gross NPAs (GNPAs) at 4.4% (a quarter-on-quarter reduction of 21 bps) and Net NPAs improving by 7 bps. Credit cost for the 9-month period was 3.7%, and for the quarter was 3.3%, expected to remain below the guided range.
The Micro LAP portfolio reached ₹22 crore AUM with zero delinquency, and the gold loan referral business grew to ₹74 crore.
Collection efficiency improved by 150 basis points quarter-on-quarter to 94.8%, with on-time collection at 99.8%. Return on Assets (ROA) reached 1.9% for the quarter, and Profit After Tax (PAT) was ₹62 crore for Q3 FY26 and ₹99 crore for the nine months. The company expects to overachieve PAT in Q4 FY26 and aims for an ROA close to 2% for FY26, with a target of crossing 3% in the next financial year and reaching 3.5% in the long term.
Cost of funds has reduced to 10.4% year-on-year, with an incremental cost of 9.8%. Net interest margin stands at 12%. The company raised approximately ₹2,700 crore in Q3 FY26 and is compliant with all lender covenants.
The company anticipates closing FY26 with an AUM of around ₹14,000 crore, representing a 14% growth, outperforming the initial guidance. For FY27, a 20% growth is projected, targeting an AUM of ₹17,000 crore, with a further shift towards a 70%-30% JLG to non-JLG mix.
Management expressed confidence in the turnaround, stating that challenges from the previous financial year are behind them, and no extraordinary provisions are expected. The company aims for a clean FY27 with sustained profitability and growth.
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Muthoot Microfin Limited filed this with the NSE as a statutory disclosure, categorised under concall transcript released. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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