* Total advances stand at Rs.1038.79 crores
* Annual profit grows 2.5% to touch Rs. 22.85 crores
April 19 2016, 23.10 PM IST || Pocket News Alert
April 19: Muthoot Capital Services Ltd (MCSL), the first listed entity of the 129-year old Muthoot Pappachan Group, has crossed Rs 1000 crores-loan book on the back of aggressive two wheeler loan financing and diversification into corporate lending. The company has also registered an impressive all-round performance, according to the audited financial results for the quarter and year ended 31st March 2016.
The Board of Directors which met in Kochi today approved the results that showed remarkable improvement in the topline and bottom-line of the NBFC, mainly driven by innovative products, aggressive strategies and entry into new markets. MCSL is a leading national player in the two-wheeler financing segment.
The net profit increased during the quarter, from Rs. 6.16 crores to Rs. 6.87 crores, recording a growth of 11.53% from the same period last year. The total income has increased to Rs. 63.41 crores during the quarter ended 31st March 2016, from Rs. 51.98 crores during the same period last year, registering a growth of 22%. Interest expenditure increased from Rs. 19.62 crores during the same period last year to Rs. 22.34 crores, recording an increase of 13.86%. The total expenses during the corresponding period recorded an increase of 24%, up from Rs. 42.25 crores to Rs. 52.45 crores. The profit before tax recorded an increase of 12.54% from Rs. 9.73 crores during the corresponding period of last year to Rs. 10.95 crores during the quarter ended 31st March 2016.
Commensurate with the quarterly figures, the yearly results also showed an impressive growth, with total income increasing to Rs. 228.49 crores compared to Rs. 191.29 crores during 2014-’15, recording a growth of 19.44%. The interest expenses during the period went up from Rs. 76.77 crores to Rs. 87 crores, which is an increase of 13.33%. The total expenses rose from Rs.157.12 crores to Rs. 193.04 crores, recording an increase of 22.86%. As a result, the profit before tax for the year ended 31st March 2016 was Rs. 35.45 crores, which was 3.75% higher than Rs. 34.17 crores for the previous year. The net profit for the year at Rs. 22.85 crores was higher by 2.5% compared to Rs. 22.29 crores for the previous year.
The improved performance of the Company was the direct result of a substantial growth in loan disbursements by the Company. The Company’s foray into corporate and other business loans also helped boost the loan disbursements. The total loan disbursements by the Company for the quarter ended 31st March 2016 was Rs. 314.65 crores. This comprised of two wheeler loans totalling Rs 234.76 crores, and Corporate and other business loans totalling Rs.79.89 crores. Considering the whole year, the loan disbursement was Rs. 927.96 crores compared to Rs. 648.84 crores for the previous year. This comprised of 1,67,204 two wheeler loans totalling Rs. 780.02 crores in 2015-2016, compared to 1,38,832 two wheeler loans amounting to Rs. 592.45 crores in the previous year. SME and corporate loans disbursements increased from Rs. 56.39 crores last year to Rs. 147.94 crores this year.
The determination of NPA based on a stricter 5-month norm for the year, compared to the 6 month norm in the previous year, led to an increased drag on the profits of the Company. Profitability was impacted through reversal of unrealized interest and provisions on NPA, loss on sale of repossessed assets and writing off of assets totaling to Rs 19.62 crores as against Rs 15.55 crores in the previous year. Also, the Company has made an additional provision of Rs. 0.53 crores towards anticipated NPAs in future. However, in spite of all these, the Company was still able to improve the profits for the year.
The Board also confirmed the interim dividend of Rs. 5.50 per share (55%) declared on 11th March 2016 as the final dividend for the year 2015-16.
Commenting on the results, Muthoot Capital’s Managing Director Mr. Thomas George Muthoot said the excitement was largely on account of looking at business opportunities beyond the existing two-wheeler financing in the already established markets.
The Company, after successful operations in South India and Western India, has expanded into the North Indian and East Indian markets besides diversifying into SME and corporate loans.
“One of the key drivers for the company all these years was its commitment for innovative products like the Ladies Only scheme through which in the last 18 months we disbursed loans to about 55,000 ladies from all walks of life totaling to about Rs 250 crores. The focus on other business loans helped a lot in burgeoning the loan book, besides adding to income and profitability. Even in the HR segment, we adopted new methods that finally made a difference in the bottom-line, apart from improving the efficiency. Moreover, it is a remarkable landmark for the company to cross the Rs 1000-crore mark in loan book” he said.
“The company has already disbursed more than 6 lakhs loans till date in the two-wheeler financing segment. The total number of live accounts as on 31st March 2016 stood at approx. 3.79 lakhs and the total outstanding loan amount was Rs. 1038.79 crores, including Corporate and other business loans”.
“MCSL intends to improve the profitability over the coming years by tapping into additional sources of funding like non-convertible debentures, commercial papers etc., apart from the traditional sources like bank loans and public deposits,” Mr Thomas George Muthoot added.
“We will continue with our expansion plans and enter more markets in the coming months. We have been regularly stressing on innovation, looking for cost effective options of out-sourcing our field operations, in back office functions, sales and collection. This is expected to have a positive impact on the balance sheet over the coming years.” said Mr. R Manomohanan, CEO of the Company.
The launch of the hassle-free e-payment facility for its auto loan customers, launched this year, also has been a hit with its two-wheeler loan customers. It is meant to ease transaction process in keeping with the changing times. This enables Muthoot Capital’s large number of two-wheeler loan customers to repay the principal amount and remit the interest in bulk or part through the e-payment facility (using debit card or net banking) that would make transactions faster and easier.