Muthoot Capital Services Limited Q2 & H1 FY27 Earnings Conference Call Summary

Trading Symbol (NSE): MUTHOOTCAP

Event Date: Conference Call held on November 06, 2026

Nature of Disclosure: Transcript of conference call discussing unaudited financial results for the quarter and half year ended September 30, 2026, pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015.

Management Participants

  • Mr. Mathews Markose – Chief Executive Officer
  • Mr. Ramandeep Gill – Chief Financial Officer

Key Business and Operational Highlights

Financial Performance (Q2 FY27):

  • Fresh business disbursement: ₹677 crores for the quarter.
  • Assets Under Management (AUM): Grew to ₹3,530 crores, reflecting a 25% year-on-year growth.
  • Total Balance Sheet Size: Reached ₹4,154 crores.
  • Live Customer Base: 586,441 customers.
  • Total Borrowings: ₹3,354 crores as of September end.
  • Overall Borrowing Cost: 9.52%.
  • Shareholders' Fund: Reported at ₹683 crores.
  • Profit After Tax (PAT): ₹4.11 crores for the quarter.
  • Net Interest Income (NII): ₹94.46 crores for Q2 FY27 (includes ~₹14 crores upfront interest from a DA transaction). For a like-for-like comparison, core NII was approximately ₹80.46 crores, up from ₹72.15 crores in Q2 FY26 and ₹77.66 crores in Q1 FY27.
  • Return on Assets: PBT ROA at 1.04%; PAT ROA at 0.75%.

Asset Quality:

  • Gross NPA (GNPA): 4.61% (₹160.11 crores). This includes an upfront money case of ₹15 crores.
  • Net NPA (NNPA): 2.75%.
  • Provision Coverage Ratio (PCR): Unchanged at 50%.
  • Forward Flow to NPA: Reduced significantly to 0.50% from 0.78% in the previous year (a 31% reduction) and 0.67% in Q1 FY27.
  • Impairment Expense: ₹21.44 crores for the quarter (₹28 crores for H1).

Portfolio Breakdown & Asset Quality by Segment:

  • Two-Wheeler: Book of ₹2,656 crores; GNPA of ₹135 crores (5.08%).
  • Used Car: Book of ₹215 crores; GNPA of ~₹4 crores (1.31%).
  • CV & Construction Equipment: Book of ₹356 crores; GNPA of ~₹3 crores (0.35%).
  • Co-Lending Book: Reduced by 52% YoY to ₹382 crores (from ₹791 crores). This business has been stopped; the only active partner (Greece Finance) was closed in Q1.

Channel-wise AUM & GNPA:

  • Dealer Channel: AUM of ₹2,453 Cr; GNPA of 4.56%.
  • Group Relationship Channel: AUM of ₹422 Cr; GNPA of 5.70%.
  • Other Channels: AUM not specified; GNPA of 0.34%.

Disbursement & AUM Growth Channels (Q2):

  • Significant contribution from the Thule channel: ₹122 crores.
  • Growth channel: ₹70.23 crores.
  • Used car channel: ~₹40 crores.
  • Co-lending book reduced by ₹115 crores.

Geographical Spread:

  • South India contributes approximately 40% of the total outstanding portfolio.
  • The remaining portfolio is evenly spread across West, North, and East regions.

Collections:

  • Total instalments received in the quarter: ₹703 crores.
  • Mode of Collection: 42% from bank/electronic mode (₹295 Cr), 41% via NACH (₹285 Cr), and the remainder in cash. 83% of collections are through non-cash modes.

Strategic Updates & Management Commentary

Rating Upgrade & Liability Diversification:

  • Received a rating upgrade to 'AA' from Brickwork Ratings. This reflects improved financial performance, discipline, governance, and strengthening business fundamentals.
  • This upgrade enables the company to launch a Pan-India Fixed Deposit (FD) campaign, moving beyond the previous restriction of accepting deposits only from Kerala.
  • The online FD platform launched earlier this year has already driven growth. The FD book grew by over 100% YoY and ~250% YoY to ₹155 crores.
  • The average FD ticket size is less than ₹5 lakhs, and the cost is lower than the current overall borrowing rate.

Funding & Liquidity:

  • Incremental borrowing in the quarter: ₹1,003 crores. Breakdown: Bank loans (₹200 Cr), NCDs (₹400 Cr), PTC/Securitization (₹353 Cr), Fresh FD (₹85 Cr).
  • The company has filed structural liquidity and ALM statements with the RBI and reports no cumulative mismatch in any bucket.
  • Liquidity position is at 148%. Unencumbered deposits with banks yield 6.79%.
  • Fund planning for expected disbursements of ₹400+ crores per month in November onwards is already in place.

Technology & Underwriting:

  • Significant investment in technology, bringing credit underwriting scorecards and Business Rules Engines (BREs) in-house using AI and a data science team.
  • This has improved time-to-market and risk separation compared to previously outsourced vendor scorecards.
  • The two-wheeler BREs are already in-house; targets are set to bring CV and used car BREs in-house by December 2026.
  • Approval rates have increased to nearly 75% from 45-50% previously.
  • Account Aggregator is used for 40-45% of two-wheeler and 65% of car/CV profiles.

Business Focus & Outlook:

  • Growth: October 2026 disbursement was ₹306 crores (highest ever for October). Targeting ₹400+ crores per month for November onwards. Aiming to exit FY27 with an AUM of ~₹4,200 crores.
  • Product Mix: Focus on scaling Commercial Vehicle (CV), Construction Equipment (CE), and Used Car businesses. Target is for these segments to constitute 50-60% of the overall book in the next two years.
  • Profitability: The CV business is expected to break even by end of FY27, and the used car business by Q1 FY28. The ultimate goal remains a 4% ROA.
  • Asset Quality & Cost: Priority remains on disciplined credit quality, collections, and operating costs. Borrowing costs are expected to reduce by a further 10-30 bps by March 2027.

ARC Recoveries:

  • Recoveries from the ARC (Phoenix pool) are better than expected, with ~77% of Security Receipts already received.
  • The pool is expected to be 100% recovered by September 2027, potentially leading to write-backs in future quarters.