Muthoot Finance (NSE:MUTHOOTFIN) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Muthoot Finance Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please take the line operator by pressing 0 on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to mister Sanket Chera from DAM Capital. Thank you, over to you, sir. Yeah. Hi. Very good afternoon to all of you. We are here to discuss Muthoot Finance q one results. For that, we have the entire management team that started with mister Jordan and Muthoot, who is a managing director. And then we have four whole time directors, mister who's an executive director.

0:57 Who is an Executive Director and Mr. Umen Mameh, who is the CFO. Without further ado, I'll hand the call over to the Managing Director, Mr. Georgi Venkatamathur, for his opening remarks. We'll follow that up with question and answers. Over to you, sir. Thank you, Sanket. Good afternoon, ladies and gentlemen. A very warm welcome to all of you joining us today for Muthoot Finance Limited earnings call to discuss our financial performance for the first quarter ended 06/30/2026. I hope all of you and your families are doing well. Joining me on the call today are members of our senior management team. Our Chairman is there, Directors are also there, Joint Managing Director is also there.

1:46 COO, Mr. Bijimon is also there and the CFO, Mr. Umun is also there and Bijimon is also there. Before I delve into the quarter's operational and financial highlights, I want to express my gratitude to our customers, employees and stakeholders for their continued trust. We are honored that Muthoot Finance continues to be recognized as India's number one most trusted financial service brand for the tenth consecutive year, along with being certified as a great place to work for five consecutive years. These allocates demonstrate the strength of our legacy and our commitment to sustainable long term stakeholder value. I'm delighted to report that Financial Year twenty twenty seven has started on a strong note continuing the robust momentum seen in the previous quarters.

2:35 Our consolidated loan AUM has expanded by 43% year on year, reaching 191,000 crores as of June 30 compared to INR 133,000 crores in June 2025. On a sequential basis, consolidated AUM grew by 5%. The consolidated profit after tax for Q1 financial year twenty seven delivered a 43% year on year growth coming in at INR 2,825 crores. Stand alone AUM or loan AUM registered a 43% year on year growth reaching 172,000 crores. And the stand alone profit after tax reached 2,550 crores, recording a growth of 25% year on year.

3:28 The stand alone income grew by 33% year on year to INR 7,603. Our return metrics remain best in class with the stand alone return on average assets of 6.09 and return of average equity of 26.6% during the quarter. Capital adequacy remains comfortably well above the regulatory requirement of requirement at 20.3%. Our core gold loan business continues to demonstrate exceptional market demand and operating leverage. As I said, the consolidated gold loan AUM rose to 175,000 crores and stand alone gold loan AUM to INR 163,000 crores, representing a 44% year on year increase.

4:22 Regarding new customer acquisition, during financial year 2027, we disbursed 8,937 crores in gold loans to over 480,000 new customers. This reinforces our strong customer retention and expanding reach. The active customer base expanded to 65.77 lakhs in June, adding over 163 active customers during the quarter, up from 64 lakhs in March 26. The branch productivity efficiency per branch improved significantly with average gold loan AUM per branch increasing by 40% year on year to 32.47 per branch.

5:10 The asset quality remains stellar. Credit losses on gross loans stood at an absolute minimum of 0.05%. We expanded our fiscal presence during the quarter by adding 86 new branches across the group, taking our group branch network to 7,654. Our subsidiaries are also performing smoothly and accelerating our vision of building a diversified non banking financial services. Muthoot Money Limited witnessed exponential growth. Loan AUM grew by 111% year on year to INR 10,550 crores, driven primarily by the strong growth of its gold loan portfolio.

5:59 The total revenue surged 137% year on year to INR $5.11 crores and profit after tax increased by 366% to 172 crores. Asset quality improved further with Stage three assets declining to 0.67%. Bellstar Microfinance showed strong recurring profitability, delivering a profit after tax of INR66 crores for this quarter compared to a net loss in the corresponding quarter last year. Loan AUM stood at INR7842 crores as industry wide stress moderated disbursement growth. Following the regulatory enabling for MFI's to expand non microfinance portfolio, Bellstar opened 45 new gold loan branches in Q1 to diversify its product lease.

6:54 Muthoot Home Finance, AUM grew by 13% year on year to INR3496 crores and profit after tax stood at INR4 crores, marking a 114% year on year increase. Asia Asset Finance, our Sri Lankan subsidiary posted impressive performance with AUM expanding 51% year on year to INR 5,270 crores and profit after tax surging 113% year on year to Rs. 43 crores. Muthoot Insurance brokers delivered a premium collection of R70 crores and achieved a profit after tax of R70 crores. To wrap up, we believe the regulatory changes implemented from April 26 in the gold loan industry are structural positive.

7:44 They strengthen transparency and drive formalization, which favors established trusted players like Muthoot Finance. While our primary gold loan business continues to perform solidly, our non gold loan portfolios spanning microfinance, housing and business loans are contributing steadily to our total assets. Coupled with our omnichannel digital framework, we are well positioned to capitalize on India's structural growth opportunities in financial inclusion. Thank you once again for joining us today. I now open the floor for your questions and look forward to an engaging discussion. Thank you. Thank you very much. We will now begin the question and answer session.

8:33 May press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Digant Hariara from GreenEdge Wealth. Proceed. Yeah. Hi. Thank you for the opportunity. So my question is that, you know, we've seen a very sharp drop in the yield this quarter, you know, almost something like 300 bps. And and, you know, the a lot of other players which have reported have not really seen yield drop at all.

9:19 So so just wanted to know, like, is this, you know, something based on the new strategy that we are, you know, targeting into compete with banks? Or do you know what is it because it's 300 bps seems a little high and not that suddenly competition had gone up in the last three months. So just some comments here. Yes, thank you. Yes, the yield in the quarter four was 20.76% this year this quarter it is 17.93. I agree, there is a drop in the yield. Due to a variety of reasons like probably we have also reduced our interest rates in this quarter or the yield because of we are giving the loans at lower rates also.

10:10 Higher rates are also there, lower rates are also there. So probably this quarter, some of the lower rate loans would have taken more precedence. Number two, last year, third quarter and fourth quarter, where we saw 20% etcetera yield was actually a very good year where our recoveries were also very good. There were a lot of loans which got renewed also, so renewal and rolled over last year. So till about last year, there were a lot of renewals and the interest collections, etcetera, were very good. And that is also factoring to follow the reasons for that. And probably as a steady state, percent plus minus maybe 18% to 18.5% should be the normal yield, which we should be looking at going forward also. So what we have now is 18%, 17.93%, probably it will going forward this year also, it should be 18%, etcetera.

11:15 So I think that's a decent yield. What we got last year should be considered as a windfall, windfall one side. So we were able to cash in on that. We have got the benefit of that. Going forward with the new strategies, the new strategies to grow the gold loan book, etcetera, probably there can be a there a concerted there was a determined effort to bring down the yield also. So we have brought down the yield, but we will keep pricing quicker after. Okay, sir. Okay, sir. Thank you. That was very detailed explanation. Sir, second question is that for this year also, now there is this gold loan gold prices, which are volatile. Second is that, you know, we have these new guidelines which have started, you know, the six... You know, the 75, 80, 85% LTV across life of the loans.

12:12 So just wanted two questions here. You know, one is your opening guidance for FY '27. Like, you generally do 15%. What would you like to give on the AUM side this year? And then second is that, you know, this gold on product has generally been a product where customers don't like to pay monthly interest. No. It's it's more been a bullet product for as long as the fifteen, sixteen years I I have, you know, tried this. So, you know, at the branches, are we able to drive any change? Do we need to drive any change? Or... And, you know, this... Because the stage one, stage two loans actually increased because of this regulation, you know, not... Nothing related to business, but yes. So the thoughts on these two things, sir. Yes, I think you're right in saying that, yes, the regulatory changes. So actually in the first two months, April and towards latter half of May, we were actually bringing in the new product. We were training our staff also for the new product, new rates, new schemes, the 75%, 80%, 85% schemes, etcetera. And as you rightly said, we need to maybe retrain our staff and the customers to think of pay at least once in a quarter.

13:25 It's not monthly, once in a quarter. I think after some time, we will we are seeing good response from the customers there, not that everybody is paying monthly, but if not monthly, in two months or three months. So that is what we are trying to implement and I'm sure that will do well. And after May, we have seen very good traction in the AUM growth and I don't want to give any guidance to that, but we will revise the guidance in the next quarter. While we are reviewing the next quarter, we will revise the guidance. So AUM should keep growing. As I said, the yield also should be in the range of 18%. That's what I think it should be in the coming quarters.

14:11 Okay. Okay, sir. Thank you so much for these detailed answers. Thank you and all the best. Thank you. The next question is from the line of Kiran Anjini from CLSA. Please proceed. Yeah. Hi, sir. Congrats on the quarter, and thanks for taking my question. Firstly, just on this yield drop thing, wanted to understand, there are no interest recoveries or any one offs in this interest income number, right? Like last couple of quarters, we were top Yes. Yes. Yes. Are of old loans which were there. We were able to recover a lot of interest there. Those are that happened in the last two, three quarters. So I think those are behind us now.

14:56 Okay. So this is a clean interest income number. And we are looking to increase this slightly, as you said, to 18%, 18.5%. Yes. I didn't say that we are going to increase, but I think it should settle at that level. It should settle at that level, 18%, 18.5%. Yes. Sure. Understood. And just overall, in terms of disbursement LTV, now that the new norms are out, how has that average disbursement LTV changed with these new norms, like, for the entire disbursement done this quarter? Yeah. Certainly a very... A certain percentage of customers are interested in the 85%, which is below 2.5 lakh. But majority of them still continue to take 75%.

15:44 That range is what is still the dispersal rate. Not that everybody is taking 85%, etcetera. There are some people. So but then the advantage is that we can offer a bouquet of products and bouquet of choice to the customer. Somebody wants to pay monthly interest, somebody wants to pay yearly interest, yearly interest also, team is there. But of course, the LTV will get reduced because we have to factor in the next interest payment, interest dues also for the next twelve months. So many combinations are there. People have got more choice and that is why I said it took January April and May for us to bring out good schemes etcetera. I'm sure now the schemes have taken place and we see good traction. So yes, I think to answer your question, originating LTV has really not gone up.

16:42 That's what your question I suppose. But, sir, okay. Let me give an example. If somebody wants a twelve month loan, 2 lakh rupees, at what LTV will you give? Will it be the same if he wants a bullet loan versus an EMI? No. That is different. I don't know. So in case of bullet payment, if it is a twelve months, you have to directly reduce the interest accrual. So if it is less than 2 and a lakhs, 85 minus interest accrual between 2.5 and 5 lakh, it will be Maybe he will get about 7577% also. If you look at interest payment, you will get the eighty five percent and and seventy five. But given that most of our customers don't you know, they they pay interest off and on. They don't pay it regularly.

17:29 So do we just assume that all the loans are bullet loans and then do that eighty five minuteus interest accrual? That's that is the reason. Piranha, we have all the schemes present now. And that's what M. P. S. Was saying that it will take some time for the employees to settle, customers also to settle that particular thing. Mostly, we are seeing that customers are taking somewhere around 74%. So we have you can pay monthly interest, you can pay once in three months, once in nine months, once in twelve months. So we have different schemes. But then LTV will be different in many of these things. If you actually deduct something, if somebody is paying prepared to pay the monthly interest, then if it is a loan is below 200, they are flat. He can he can get all the 85%.

18:19 Understood. And sir, what would the difference in the interest rate be between a monthly interest loan and a bullet loan as of today? No. It is not linked to interest, etcetera. It is not at all linked. Just because he's agreed to pay monthly or he's paying only once in twelve months, there is no interest difference. Schemes have different interest, not... It is not based on the repayment promise of one month and three months and twelve months. Okay. Understood. And just lastly, sir, this quarter, we've again turned around in terms of customer growth. Last two quarters, it was declining. What factors do you think led to this pickup in customer count or tonnage growth this quarter?

19:06 Customer count, definitely newer customers are coming. But tonnage growth is actually what you guys are always saying, the gold price. When the gold price falls, the tonnage goes up because he has to bring more gold in today. If the price was high, he brings only lesser quantity of gold. That's what I'll be trying to tell last year four quarters, but I think people now we'll start understanding. If the gold price falls, the turnages keep on increasing because somebody wants 1 lakh earlier need to give 10 crores. Now it's a good 12 crores. Simple as that. Understood. Understood. Yes, sir. Okay. That's it from my end. Thanks, and wish you all the best. Thank you. The next question is from the line of Shripal Doshi from Macquarie. Please proceed.

19:56 Hi, sir. Thank you for giving me the opportunity. So my question was on the on on the product side. So are we still continuing with the Verilab gold loan product or we've also launched new products on the income generating segment front? Yes. I think we've I think CEO was saying that we have different products, monthly interest product, income generating product, less than 200,000,000 Actually today, booking of products are there and too many people are spoiled for choice today. No. The income generating loans, just to take advantage of LTV, we have not launched. I think that one may not be the correct way unless we are able to assess the repayment capacity as well as the end use of the product, that may lead to problem. Many companies have started.

20:48 I believe in the correct way, we will be starting it soon. So not just because somebody says, is income generating loan, we can't give an income generating. We have to assess it, We will capacity, except that we can give. If you bypass that, we will fall into profit. Right, right. Got it, sir. So basically, we will plan to launch there and wherein we can look at end use as well as revalue the income. But then in that case, would we also comfortably give higher LTV or would we want to prudently manage it below We 85 also give higher LTV. No problem. So we assess the cost, which is that 85% LTV and less than 2.5%, we take the first because we see maybe 2%, 3%, 5% of our portfolio will be there. It doesn't matter.

21:41 Right, right. Got it, sir. Got it. So the second question was on the tenure front. So why, you know, you highlighted about the... To to the previous participant on the on the calculation side. But have we brought down the tenure to, let's say, three months, six months for our balloon product? I think I told you, we have a three months product, we have a monthly interest product, we have a six month product, nine months and twelve months. People can choose and take. But then when he chooses the longer term bullet repayment, the LTV has to be recalculated to a lower level. That's it. Right. Right. So then in that case, are we seeing more interest because more interest for shorter tenure and that is why the increase in GS2 as well because it's all interlinked from that recognition standpoint.

22:35 No, no. Our interest calculations are not based on that. I think that is not something it is because of senior base, etcetera. It is based on many other factors, which I would want to discuss now here. Got it, sir. Got it. I'll take it offline maybe. Thank you, sir. Thank you so much for answering my questions. Thank you. The next question is from the line of from Aviva Life Insurance. Please proceed. Hi. Good afternoon. Thank you for the opportunity. Sir, I wanted to check if a rating upgrade is in the offering. Are there any discussions with the rating agencies regarding an upgrade? First of all, thank you for attending the call on a Saturday.

23:26 We work, but I'm happy that some analysts people are also working. So answering your question, I think CFO will answer the question. Glad that you asked, I hope analysts from Crystal and Ikra are also there on the call. They are listening to it. They may answer. We always have our hopes and our expectations. But again, just with the as Muthoot Limited with the credit rating agency probably. We should see good things happening now. Okay. So no discussions that have happened and it's, you know, entirely...

24:15 That the management may have had with the agencies regarding this or it's can we expect that sometime in the future? Every six months we engage with them, we open our hearts to them. We open everything and show them, but then it takes time for them to also get comfortable and do this. Okay. Okay, sir. Thank you. Thank you. The next question is from the line of K. Shivakumar from ICICI Pension Fund. Please proceed. Yeah. Thank you for the opportunity. Good afternoon, sir. Sir, my question is with regarding... With regards to the increasing competition in the segment. We are seeing... Of course, we have seen the competition from the banks. We have done that.

25:03 We have dealt with that in the past. But now increasingly, most of the major NBFCs are also increasingly focused on the gold loan segment. So will be... Will there be any change in strategy in house in terms of interest rates or or the way you branch out the network in terms of how you will deal with increasing competition from other NBFCs? Yes. Competition from total NBFC business today is only INR 4 lakh crores. Total bank gold loan is INR 16 lakh crore. So where is INR 16 lakh crore, where is INR 4 lakh crore. Anyway, from NBSEs, etcetera, we don't have a separate strategy for any NBSEs. But with all of the competitions, whether it's Bang or NBSC, we have the same good customer service, quick service and customers generally feel that Muthoot is the right place to come for a cold run. That is what has been our brand, our strength. Muthoot has always been the forefront of marketing or marketing the concept of gold loans. So people definitely refer to that feel that this is there. So competition will come. There is no special strategy for competition.

26:17 We'll do our best. Our customer service will be the best. We will do all that is necessary. But probably, as I was saying in the beginning also, probably that we may see some yield compressions, etcetera. But then we what we have earlier, maybe 20%, etcetera, we said it will be around 18% plus. So that's still a decent yield for us because we have the legacy book and legacy portfolio. The new players who are coming, we'll have to contract with low interest rate schemes to compete with banks. They have also to compete with banks to compete with others also. But we having a legacy portfolio with us, legacy customers with us, we have some advantages there. So these are some things which any as the quarters go, we will see the fittest will survive and the non focused people will go. That is what we already seen earlier also. People who are not fully focused or fully into this have just started a whole loan business.

27:23 Just for starting a whole loan business, I don't think they will be able to sustain. But somebody who is keen fully with the whole loan like Muthoot, probably we have an opportunity there. And let us wait for the next few quarters to see what is going to happen. Got it, sir. Sir, in terms of geographical focus, South is still 49% of your total AUM. So going forward, how much scope of growth do you see from the other more recent areas like, say, the Eastern India and Northern India? Do you still see scope for growth there? Or do you think this is what we can do, the pace of growth in those geographies? No, no. The gold loan business is growing everywhere. South is just that South, it started much earlier, maybe a few decades earlier, started in South. So people of South are more prone to gold, more comfortable with their gold loan. That comfort is generally catching up in other states also, Northeast and West. Our geographical location of starting a loan, we are present everywhere.

28:30 There's no place we are not present. It is just that whether we want to add more branches in a place, maybe in Lucknow, we want to add more branches, we will add more branches in Lucknow or Japo or Delhi or Jalandhar, etcetera. So we have branch there. We have regional offices there. So wherever we see a business opportunity, we have an ear to the ground in all these places because we have marketing and salespeople and also our field people working. So they know where the potential is, and then we open branches there. There is no geography we are left out. But as you said, South is concentrated more because the business also is more in South. If you look at the statistics of gold loan, 6070% of the gold loan business is from South, even for banks, 30% only from all the others. So South Korea has started gold loan business, whether it is banks or MBS, continues, but there is more there is potential in both places.

29:31 So answering your question, we will be opening branches wherever there is a potential or wherever we see there is scope for getting more new business. Got it. Sir, and one last question, if I can chip in. What is your plan for Bellstar? Because even after so many years, we are still I think we are undergrowing in terms of the potential there. We are just INR 7,800 crores. And now that we are seeing that microfinance segment has stabilized across the country, will you start getting aggressive in terms of loan growth over there? To answer the first question, we will only do the accuracy in microfinance. That's the first question, first answer. The second is we would like to have a very calibrated, less risky portfolio.

30:22 And we have actually trained given instructions to the VESTRA team to do microfinance only with selected good quality customers, not just for the sake of see, microfinance, one quarter you'll see doing well. Next quarter, you'll see something else happening. After three quarters, you'll see something else. So it is like that. It is a cyclical business, etcetera. But we have been trying to take advantage or trying to use the facility of the 40% other loans by doing whole loans also there. Today, we have 100 plus branches opened and only another 50 in the next three months to do exclusively whole loans, and they have started. They are doing well. So we'll have mix of Secured Lending and unsecured lending. Secured lending as a policy, we would like unsecured lending, microfinance, we would like to give only to better, good quality customers, not for the sake of AEO because we don't want to show anybody that we need to do a lot of AEO mix etcetera. If it is low, it is low.

31:36 Got it, sir. Thank you. That's it from my side. Thank you. The next question is from the line of Raghav Garg from Ambit Capital. Please proceed. Sir, good afternoon, and thanks for the opportunity. I have two questions. One, I was going through your last quarter transcript, which is as of May 14. Please. Please. You... Am I audible now? Yeah. Better. Better. Okay. Sir, I was going through your last quarter transcript, which is as of May 14. And at that time, you had indicated that you did not see the need to lower your yields from then 20%. So for your yields to drop 300 basis points quarter on quarter, the yields from mid May to June would have to be lower than 18%. So is that understanding correct?

32:22 And if yes, then can you tell me what is the average yield for the month of June or maybe July? That's my first question. So, Rakul, there are a couple of things, as Muthoot has said. Last year was an extraordinary year where we saw the gold prices increasing our top ups happening. So where we are able to do most of the recovery collections without needing to give any discounts to customers or auctioning of large amounts of gold under recovery etcetera. So that is one thing. Then there was NPA accounts we have we could collect most of the full income. Third, the ARP investment proceeds, are directly because of their principal recovery has happened, the remaining amount was coming into the P and L. Now specifically, the fourth quarter third and fourth quarter, we saw a large amount of renewals happening, especially because the new regulatory regime was kicking in from April 1.

33:26 So we encourage also these customers to do roll over, top ups, etcetera. So most of the loans, as you know that we follow a rebate structure. So a lot of these loans, because of their ability to roll over, are standing at a lower yield structure currently. Probably they will increase to migrate to a higher level. So that is an important factor, which has also resulted in a yield need. Then as Muthoot has said, some reductions we have done in the first quarter. Then probably lastly... How much would have the reductions been?

34:12 How much would have... The gold prices in the fourth quarter, those incomes are not there in the first quarter. Yes, go ahead, please. No, no, I was just saying that how much have the reductions been? And another related question is that if you can give the yields for June considering that all of April and half of May was at 20% yield. So if you can help us with the yields in the June, in the month of June, that will be very helpful. So we don't have any bifurcation for June and all. You need to understand what led to this. So these are all reasons why we don't have an exact breakup because of this or what happened in June, etcetera, what is the interest income.

35:01 Sure. And the second question is on your cost of borrowing. How much more do you think it can increase from here or will it settle here? It's up about seven bps quarter on quarter. No. So I'm not expecting any reductions in the cost of borrowing. It will mostly remain at these levels. Depending upon RBA policies, it might it can go up. It all depends on how RBA is going to look at revising the benchmark base. Understood. Maybe another five, seven bps, 10 bps, any ballpark number, whatever... It doesn't matter much in business where you're generating a 5% plus ROE. Of course. Thanks a lot for all those answers. Thank you.

35:50 Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you to restrict to two per participant and rejoin the question queue again. The next question is from the line of Rajiv Mehta from Yes Securities. Please proceed. Yeah. Hi. Good evening. You know, just on the... You know, you said that there is no interest difference between a customer paying quarterly or paying semi annually or paying annually. And you said that the pricing will vary across schemes. So what do you mean by schemes? And what is the pricing range difference across schemes? I mean, on a per month basis or an annual basis, what are the, you know, different lending rates or structure that they are offering, and what is the price range, right now through the branches. Yes. Any of these things which you asked is there in our website, but I don't want to go into the granular details of how we collect it on a public forum like this. So I think that is Mhmm. What what are the And just one clarification, sir, where is the customer who will pay you quarterly, semi annual, or or maybe annually also interest, but the principal payment comes at the end of the term of the loan. Right? And the term of the loan remains at twelve months.

37:05 We have twelve months loan. We have nine months loan. We have three months loan. We have monthly interest loan source. EMI also. EMI also. EMI also. But but were these recently introduced or they were always there? Yes. All these things were introduced from April 1. April 1. April 1, no? Okay. Yes, yes. And just lastly, just to focus back on volume growth because maybe the gold prices are stable and maybe I can see that there is a good pickup in customer acquisition, old customer reactivation. What will what is driving I mean, how are you driving your branches to acquire more customers, retain old customers? Because I'm sure there will be a lot of pressure on competitors also to take over your customer.

37:52 So how are we driving our branches to ensure that we get good volume growth in a year when the gold prices could be largely stable? Most of these are internal strategies. We have strategies to retain our customers. We have strategies to get customers, etcetera. Again, we'll have to really demonstrate that in our performance. And I'm sure going forward also. See, you saw the gold price coming down and still the AUM going up. So it is not a function of the gold price that the gold business is growing. The business is growing because there is need for funding. So that is something which I have been telling for the last several quarters, but people sometimes refuse to understand that, refuse to understand that. So it is not just because I have a high gold price, I'm going to borrow big money. I'll borrow only if I feel that I can repay it. Otherwise, he'll lend it off. So instead of selling it, he is borrowing it, he is wanting to repay.

38:49 So we have our strategies for all these things, all these competitions, etcetera. And I'm sure in the next quarter, she will see good growth in AUM also. Got it. Thank you so much, sir. Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you to restrict to two questions per participant and rejoin the question queue again. The next question is from the line of Muthesh Jain from Investec. Please proceed. Thanks for the opportunity. The first question is on LTV. What is our LTV as of June including accrued interest? So it will be around 65% or 66%.

39:34 66.6%, I think. 66%. Okay. Does include the accrued interest also, right? Yes. Okay. Second is what gives you confidence that our yields will be stabilizing at 18%? Because in one quarter, we have seen 300 basis point decline in yields. And I believe that in one quarter, the entire book would not have come for renewal. So the large part of the book, say, 40, 50% of the book will still come for renewal in coming quarters. So what gives you confidence that it will stabilize at 18 only when the new... Book, which is at, let us say, 22% will come for renewal? That is one. And what is the incremental yields in quarter one when we have disbursed the loans, what is the incremental yields on those loans?

40:19 So I think, as I said, generally, the yield will be 18%, 18.5%. Incremental yields are a basket of yield. We have higher yield also. We have lower yield, etcetera. What gives me confidence is just my experience in the last thirty five years in this company with gold alone. It gives me the experience to say what will happen, what will be the things, etcetera. So that's what I should be referring to here. So, Muthoot, fourth quarter, as I said earlier, there have been a very large amount of renewals. Now one need not be too much concerned about in the new scenario because we are rolling out mostly the shorter end schemes. Suppose because it's a shorter end, we can always reprice at a shorter intervals.

41:07 So that flexibility we are having. And based on that, we are fairly looking at a yield range of 18% to 18.5%. And if you can share the data on incremental yields on gold loans for quarter one, that would be helpful. Yes, sir. Last this quarter was INR17.93 million, last quarter, INR19.56 million, previous to that INR20.76 million, previous to that INR20.16 million. So the current structure on the... On gold loan schemes, you know, as Sandeep has said, it is there in the website. You know? We have a a number of products and the pricing for that. Sure, sure. And the last question is how many what percent of disbursement are happening at 85% LTV or ballpark number? Very low, maybe 5% or so. To 4% to 5%. 4%.

42:04 See, again, answer is the same. Everybody doesn't borrow just because the price is there. They borrow only to the extent of what they feel they will be able to repay. That is what people borrow. Otherwise, they will all go and sell this gold. Is it better to sell the gold than take 75 or 70 or 85? So 85, your answer, 85 just started maybe 3%, 4%. Sure, sure. Thank you. So that's it from my side. Thank you. The next question is from the line of Gaurav Khandilwal from JPMorgan. Please proceed. Hi. Good evening. Thanks for taking my questions. I'm relatively new to the company, sir. But I'm just trying to understand, in the last twenty years, the mix of loans in South Region has come down from 84 to almost 50% now. Where do you look at this going in the next five to ten years?

43:01 And if I can also get your views on do you think that the penetration rate of gold loans in Southern India is high and hence there is a need to shift to North or East or West or any other part outside of South? Or is it just a function of getting more business in other regions? So just wanted your thoughts around that, sir. I think I answered that question earlier also saying that South the concept of whole loan was there much earlier than in North India or people were aware of gold loan and people started using gold loan as a product. Maybe a few decades, corporateized gold loans may be much earlier. So that is why there's a head start in South India. But North East and West is definitely catching up. And again, the credit should go to Muthoot for marketing the concept of gold alone in other than South. We were the pioneers in this. We were the people who introduced the whole loan as a business loan proposition to North India. Today, North India is also having lot of business. So there is potential there.

44:14 South India is only onefour of India, threefour is Northeast and so there is always potential there. So whether we will stop opening branches in South India, no, because South India still has lot of gold on potential and there is scope for more people. North India definitely is less penetrated. It needs little more concept selling also in newer places. So when concept selling also happens much better, Northeast and West, we also start doing better. Got it. So thanks for that. So is it fair to say that in next five to ten years, there's some degree of possibility that the 50% South mix goes down to maybe 40% or even lower? How does this 50% is 50% is See, a matter, Northeast and West is the largest geography. South is a small... Onefour. Yes. It's only onefour.

45:07 So it is not that house absolute loan amount has come down. Loan amount has grown up, but Northeast and West has grown larger. So... It is it's a concept. When people start accepting gold as a concept, gold load as a concept, it will all pick up in North India also. Got it. And my second question is what is something on regulations or competitions that keeps you the most worried about business? You've done to your point, banks have always been there and you've been competing with them for many decades now. But what are top one or two things top of your mind which keeps you worried about the business? There is nothing there is no single thing, etcetera, keeps worry. It is just that we need to do better and better. We need to be one step ahead of everybody competition.

46:01 And more than being one step ahead, we need to continue to get the customers' trust. This is a trust business. So we should continue to get the trust of the customers, then everything else is passing. Everything else is simple. It. Thank you so much. Those were all my questions. Thank you. The next question is from the line of Krishan Parekh from Morgan Stanley. Please proceed. Thank you for taking my questions. Couple of data point questions, if you could provide us the loan mix by ticket size as well as the auction number for the quarter.

46:47 And my second question is on your branch edition plan. So I see that you have added about 60 branches in the first quarter at the stand alone level. If you could just lay out your branch edition plans for the stand alone business for the full year as well as for Muthoot Money, etcetera? Those are my questions. So the ticket size, about 3 lakhs is 38%. 1 lakh to 3 lakhs is 35. And the branches we opened, it's 85 branches. Probably in this year, we should be opening another 500 to 600 branches overall in the group. And specifically for stand alone, if you could tell us, sir?

47:38 Stand alone means Muthoot Finance. Yes, Muthoot Finance. Maybe two hundred two hundred two purchase. Understood. Understood. That's all from my side. Thank you. Thank you. The next question is from the line of Bharat Shah from BCS Capital Idea Private Limited. Please proceed. Yeah. Hi. Thank you. Very clearly, competitive conditions have become far more intense than you might have probably felt that way only a few months back because the yields have come down, the architecture of the products is dramatically altered at our end.

48:27 And all of that seems to suggest that the competitive conditions probably have been more intense than you might have budgeted. And when I look at even just the last quarter numbers, we reported INR 3,400 crore of net profit. By that asset base is grown from the last quarter from INR 182,000 crore to INR 191 crore, but profits have come down by almost 16%, 17%. And the profit of this quarter is equal to what we reported in December quarter at INR2825 odd crores.

49:14 So am I to understand that probably the current year overall is likely to be a bit of a washout as far as our performance is washout in the sense of achieving any meaningful growth, not was out in any other sense, but any meaningful growth in the bottom line in the current year looks unlikely, is high sheet? I think you have given the question and the answer also. So what you needed answers from me then. Said the question. You said the answer. I want the confirmation whether I'm thinking correctly or not. See, no, no, don't use about washout. The company has made a profit of INR2500 crores, which is almost like 6% ROA.

50:05 How many companies in India is making that kind of ROAs? Still it is better. I think in the initial questions, we explained in detail what led to that comparative profit quarter on quarter. But from last year, we have suddenly there is an increase of almost 25% on profits. We explained to you what are the reasons which is leading to a quarter on quarter decline because last year was an extraordinary year and quarter. So that explains this. And we also gave the reasons of renewals etcetera happened in the last quarter, especially large amount of renewals has happened, which is leading to the loans almost remaining at a lower slabs for a major portion of the quarter and the shorter duration.

50:58 So which is leading to a lower interest income. And I think we are fairly those extraordinary or incomes are not going to be present in the current year. So I think we are fairly comfortable with the interest yield of around 18%, 18.5%. It can generate a good decent ROE. I let me rectify myself. I use completely wrong word, washout, and I quickly corrected that washout more in the sense of achieving growth. Over 20 that I've seen Muthoot Finance, and I've been observing it year after year, it has consistently produced a meaningful growth in the band of 15% to 20% over year after year, over the twenty year period that I've seen.

51:57 And current year probably looks to me that given the sharp drop in the yield that probably current year may not produce any meaningful growth in the bottom line. In that sense of achieving any meaningful growth in the bottom line, I used that word, but I I stand corrected. I didn't mean wash out in any other sense, but that the profitability, the absolute profits probably may not grow by any maybe by a single digit is what it looks like to me in the current year, which is beyond We don't give any profit guidance. What we generally give a guidance of AUM growth because profits are secondary for us.

52:48 Loan growth is the primary factor. We believe that profits will follow. We have given a guidance of 15% because considering that last year we had a good growth. We also expect some revision to happen after the half year results. So let's review the growth numbers we achieved till September end and then accordingly we can give a revised guidance if it is needed. 15% from June based, you are from March 26 to 15%. So roughly about INR 210,000 crores or higher. I don't know what the figures are. No, we had INR 150,000, 15% means it's almost like 17,018 thousand.

53:39 No. No. I mean, our asset base was 1 lakh 82,000 crore is on March 26. So 15% will mean about the income. I'm talking consolidated. Okay. You're okay. 15% is 15%. Okay. And which means we probably expense characteristic and cost of fund you clarified already. Therefore, the patent probably in the quarters ahead will replicate based on the size of the business attained similar to what we have seen in June. That will be fair assumption to me, correct? So that's what I said. No. We don't really get into the profit guidance.

54:27 We give a group guidance. Let's see how that is panning out. Okay. Thank you. Thank you. The next question is from the line of Abhijit from Muthoot Finance Limited. Please proceed. Yeah. Good evening, sir. You for taking my question. Sir, as you would have seen all the participants who are there on the call today, For the last few quarters, you were all just trying to understand what is really happening on the yields, how much is the recoveries in the interest income that we were reporting. And I think, I mean, three quarters, four quarters, we were all struggling given the expansion in which we have explained already that there were recoveries and notes we explained there were renewals last quarter and which is why the loans are sitting at a lower rate given the repeat structure that you follow.

55:23 So sir, I mean, again, just just a humble request from my side, we are the largest gold loan company, almost a 1,250,000,000,000 market cap. So, I think that's a fair ask when we we asked you that what are the clean yields, gold loan yields, which were there for the last two quarters and what are the clean gold loan yields this quarter? So if you could just articulate that for all of us, that will be very useful for everyone on the call. Call? I think we gave a yield is 17.93%. Yield is 17.93%. Last quarter it was 19.56%. Previous year it was 20.76%. Previous year that is 20.16 That's the yield. So this year the yield is 17.93.

56:09 So this quarter, sorry. So sir, all the numbers that you said just now, do they include the recoveries as well or are these clear golden yields without any recoveries? So with recovery. What is recovery, I mean? Which is where I'm asking. Sir, recoveries from the NPA loans where you were able to recover the overdue interest. At different points of time, NPA recoveries happens, rollovers, when it happens, if it is at a higher slab, those recoveries happens. More old recoveries happen last year. ARC receipts, whatever is over and above that happens. Auction, whatever has happened, those incomes will have be What are those are included in the yield?

56:58 Top up charges we collected, that also included that also will come in. So post KFF situations are not there in the first quarter. And additionally, we have also fine tuned some of the rate structure in light of the new regime. To that extent, there could be some impact also. So steady state, expect 18 to 18.5% yield, steady state. Got it, sir. Got it. And sir, which is where I mean, I am at least finding it a little difficult to understand that despite whatever recoveries we had over the last few quarters, how can yields decline by maybe two sixty, 300 basis points in one quarter?

57:45 What you need to understand is these are not long term fixed rate contracts. These are all short term contracts. So there, it all depends on and we are dealing with 100,000 customers a day. So there, these loan cycles are very short. And added to that, these kind of fluctuations impact the yield. Now as I said, profit is secondary for us. The loan growth is important and how we take care of the customers. So to that extent, we follow different policies at different points of time, which will have an impact on the yield. But we believe that 18% yield is something maintainable. Got it, Muthoot. And then the last question that I had was, I mean, just trying to understand whatever I have heard on this call until now.

58:35 Are we now planning to Hello? Hi, Is better now? Yes. Now we can hear you. Just repeat the question. Last question. Yes, sir. So I was just trying to understand this, sir. I mean, I mean whatever I have heard on this call, somewhere I think that we are now acknowledging the high competitive intensity, which is there and I think I mean last couple of quarters we have all been asking.

59:24 And to that end, whatever changes you have done on the interest rate structure, are you planning to aggressively compete now? Only the the only thing there is that I heard and this are say that, let's see who's the fitest to survive. Let us wait for a few more quarters. Just trying to understand, can we, in the next two to three quarters, get to a point where, you know, everyone, every gold loan lender in the country starts cutting rates on gold loans, and and you remember that time between maybe December 2022 to June 23, there for us also the yield had declined by about three fifty basis points. So so can we get to a point in the next couple of quarters if everyone starts competing aggressively? Quite possible. Know. There could be a, you know, question where everyone, you know, drops their rates, etcetera. There is a... Certainly a possibility is that, but, you know, we have our benchmark.

1:00:18 And even with these rates we have been able to generate a growth this quarter of almost 6%. That is about INR 9,000 crores of growth. Yes sir. Thanks for that. And sir, lastly, I think this data keeping question you had shared the mix of gold loans by ticket size. My line was not good. So if you could just repeat that for one q and four q and the options number, please. So, no, about relax, no, it is Hello? Just give me a second. Yeah. Sure. So March 25, it is 38% above R3 lakhs and R1 lakh to R3 lakh is 35 percentage.

1:01:20 Don't have the June the number that you said now for March 26. Sorry. Sorry. Just a second. Sorry, I think June 26, think, no, about 3 lakhs is 69%, this one lakh to 3 lakhs is 22%. Sorry, earlier number gave us wrong.

1:02:12 This was June 26, sir. And what is March 26? March 26. Let me March 26 is 51 percentage. Above 3 lakhs is fifty one percent and 1 lakh to 3 lakh is 30%. Got it. So thank you. And the options number? Negligible.

1:02:57 Correct. This quarter? So it's very around 60 to 90. Negligible. Got it, sir. Got it, sir. That's also my side, sir. Thank you so much for answering all my questions, and I wish you and the team to answer the numbers. Thank you. Thank you. That was the last question for today. I now hand the conference over to the management for the closing comments. Thank you, and over to you, sir. Thank you. You, well wishers and investors for attending the call today on a Saturday evening. So wish you all the best. And from our side, we will ensure that the company runs well, the company makes adequate business, company makes adequate profit and all stakeholders are kept happy. So that is our job and we will continue to do that certainly with blessings of everybody including you, the analysts etcetera who generally give us good guidance and good information sources.

1:03:57 So we appreciate that and goodbye from the management team and good day to all of you. On behalf of DAM Capital, that concludes this conference. Thank you for joining us and you may now disconnect your lines.