Muthoot Finance Q1 profit dips 7% to Rs 180 cr

Company had reported PAT of Rs 194 crore for Q1, 2013-14

Muthoot Finance Ltd, the largest provider of loan-against-gold in India, today reported 7.21% dip in profit after tax to Rs 180 crore for the first quarter ending June 30, 2014-15.

It had reported PAT of Rs 194 crore for Q1, 2013-14.

The company's total income for Q1, 2014-15 stood at Rs 1,092 crore, down 15% from Rs 1,286 crore in the year-ago period.

Its standard asset provisioning stood at 0.46% at the end of the quarter, as against the regulatory requirement of 0.25%.

Muthoot Finance's Managing Director, George Alexander Muthoot, said: "We hope the new RBI policy and new policies of the government will jumpstart the economy."

Degrowth in gold loan portfolio has further reduced to Rs 313 crore during the quarter, compared to Rs 645 crore in the previous quarter (Q4) of 2013-14.

PAT has remained stable quarter-on-quarter and would have been higher by around Rs 7 crore but for higher depreciation on account of change in the calculation method based on useful life as per the new Companies Act, 2013 provisions.

For the next 12 months, the company expects 15% growth in gold loans and 15-20% increase in profit, Muthoot said.

The company had re-activated branches after almost two years of turbulent and inactive period and was seeing 'positive results' at the grassroots level, he said.

Muthoot has added 100 branches since last year, although only one more branch was opened last quarter. "The company has not closed down any branch nor retrenched employees," he said.

The company's Executive Director, K P Padmakumar said profit has been flat and was the result of what was happening in the economy.

Despite all the difficulties in NBFCs, customers were coming back, footfalls were increasing which was the main reason for the reduction in outstanding, he said.

Muthoot has also started re-structuring products to suit the needs of the customers, he said.