Q1 2027 Muthoot Finance Ltd Earnings Call

August 1, 2026

Speaker #1: Ladies and gentlemen, you have been connected to the Muthoot Finance Q1 FY27 earnings conference call. Please stay connected; the call will begin shortly. Ladies and gentlemen, you have been connected to the Muthoot Finance Q1 FY27 earnings conference call.

Operator 1: Ladies and gentlemen, you've been connected to Muthoot Finance Q1 FY27 Earnings Conference Call. Please stay connected, the call will begin shortly. Ladies and gentlemen, you've been connected to Muthoot Finance Q1 FY27 Earnings Conference Call. Please stay connected, the call will begin shortly. Ladies and gentlemen, good day, and welcome to the Muthoot Finance Q1 FY27 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 signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanket Sheth from DAM Capital. Thank you, and over to you, sir.

Operator: Ladies and gentlemen, you've been connected to Muthoot Finance Q1 FY27 Earnings Conference Call. Please stay connected, the call will begin shortly. Ladies and gentlemen, you've been connected to Muthoot Finance Q1 FY27 Earnings Conference Call. Please stay connected, the call will begin shortly. Ladies and gentlemen, good day, and welcome to the Muthoot Finance Q1 FY27 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 signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanket Chheda from DAM Capital. Thank you, and over to you, sir.

Speaker #1: Please stay connected; the call will begin shortly. Ladies and gentlemen, good day and welcome to the Muthoot Finance Q1 FY27 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during the conference call, please take the operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Sanket Sheda from DAM Capital. Thank you, and over to you, sir.

Speaker #2: Yeah, hi. Very good afternoon to all of you. We are here to discuss Muthoot Finance Q1 results. For that, we have the entire management team with us, starting with Mr. George Alexander Muthoot, who is the Managing Director, and then we have our four full-time directors: Mr. Epin Alexander, who is an Executive Director; Mr. K.

Moderator: Hi. A very good afternoon to all of you. We are here to discuss Muthoot Finance Q1 results. For that, we have the entire management team with us, starting with Mr. George Alexander Muthoot, who is our Managing Director. We have four whole-time Directors, Mr. Eapen Alexander, who is an Executive Director, Mr. K.R. Bijimon, who is an Executive Director, and Mr. Oommen Mammen, who is the CFO. Without further ado, I will hand the call over to the Managing Director, Mr. George Alexander Muthoot, for his opening remarks. We will follow that up with question and answers. Over to you, sir.

Sanket Chheda: Hi. A very good afternoon to all of you. We are here to discuss Muthoot Finance Q1 results. For that, we have the entire management team with us, starting with Mr. George Alexander Muthoot, who is our Managing Director. We have four whole-time Directors, Mr. Eapen Alexander, who is an Executive Director, Mr. K.R. Bijimon, who is an Executive Director, and Mr. Oommen Mammen, who is the CFO. Without further ado, I will hand the call over to the Managing Director, Mr. George Alexander Muthoot, for his opening remarks. We will follow that up with question and answers. Over to you, sir.

Speaker #2: R. B. Demon, who is an Executive Director; and Mr. Omen Mamed, who is the CFO. Without further ado, I'll hand the call over to the Managing Director, Mr. George Alexander Muthoot, for his opening remarks.

Speaker #2: We'll follow that up with questions and answers. Over to you, sir.

Speaker #3: Thank you, Sanket. Good afternoon, ladies and gentlemen. A very warm welcome to all of you joining us today for the Muthoot Finance Limited earnings call.

George Alexander Muthoot: 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 Q1 ended 30 June 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, our Directors are also there, Joint Managing Director is also there. Our COO, Mr. K.R. Bijimon, is also there, and the CFO, Mr. Oommen Mammen, 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.

Speaker #3: To discuss our financial performance for the first quarter, until 30 June 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 Directors are also there, and our COO, Mr. B, is also present.

Speaker #3: Demon is also there, and the CFO, Mr. Omen, is also there, and B. Demon 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.

Speaker #3: We are honored that Muthoot Finance continues to be recognized as India's number one most trusted financial services brand for the 10th consecutive year, along with being certified as a great place to work for five consecutive years.

George Alexander Muthoot: We are honored that Muthoot Finance continues to be recognized as India's number 1 most trusted financial service brand for the 10th consecutive year, along with being certified as a great place to work for 5 consecutive years. These accolades demonstrate the strength of our legacy and our commitment to sustainable long-term stakeholder value. I am delighted to report that FY27 has started on a strong note, continuing the robust momentum seen in the previous quarters. Our consolidated loan AUM has expanded by 43% year-on-year, reaching INR 191,000 crores as of 30 June, 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 FY27 delivered a 43% year-on-year growth coming in at INR 2,825 crores.

Speaker #3: These allocations demonstrate the strength of our legacy and our commitment to sustainable, long-term stakeholder value. I'm delighted to report that financial year '27 has started on a strong note, continuing the robust momentum seen in the previous quarters.

Speaker #3: Our consolidated loan AUM has expanded by 43% year-on-year, reaching ₹1,91,000 crore as of June 30, compared to ₹1,33,000 crore in June 2023. On a sequential basis, consolidated AUM grew by 5%.

Speaker #3: The consolidated profit after tax for Q1 FY27 delivered a 43% year-on-year growth, coming in at ₹2,825 crore. Standalone AUM—our loan AUM—registered a 43% year-on-year growth, reaching ₹1,72,000 crore.

George Alexander Muthoot: Stand-alone AUM or loan AUM registered a 43% year-on-year growth reaching INR 172,000 crores and the stand-alone profit after tax reached INR 2,550 crores, recording a growth of 25% year-on-year. The stand-alone income grew by 33% year-on-year to INR 7,603 crores. Our return metrics remain best in class with the standalone 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 procurement 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 INR 175,000 crores and standalone gold loan AUM to INR 163,000 crores, representing a 44% year-on-year increase. Regarding new customer acquisition, during FY27, we disbursed INR 8,937 crores in gold loans to over 4,080,000 new customers. This reinforces our strong customer retention and expanding reach.

Speaker #3: And the standalone profit after tax reached ₹2,550 crore, recording a growth of 25% year-on-year. The standalone income grew by 33% year-on-year to ₹7,603 crore. Our return metrics remain best-in-class, with the standalone return on average assets at 6.09% and return on average equity at 26.6% during the quarter.

Speaker #3: Capital adequacy remains comfortably well above the regulatory requirement at 20.3%. Our core gold loan business continues to demonstrate exceptional market demand and operating leverage.

Speaker #3: As I said, the consolidated gold loan AUM rose to ₹1,75,000 crores and standalone gold loan AUM to ₹1,63,000 crores, representing a 44% year-on-year increase.

Speaker #3: Regarding new customer acquisition during financial year 2027, we disbursed ₹8,937 crore in gold loans to over 4,80,000 new customers. This reinforces our strong customer retention and expanding reach.

Speaker #3: The active customer base expanded to 65.77 lakhs in June, adding over 1.63 lakh active customers during the quarter, up from 64 lakhs in March '26.

George Alexander Muthoot: The active customer base expanded to INR 65.77 lakhs in June, adding over 163,000 active customers during the quarter, up from INR 64 lakhs in March 2016. The branch productivity efficiency per branch improved significantly with average gold loan AUM per branch increasing by 40% year-on-year to INR 32.47 crores per branch. The asset quality remains stellar. Credit losses on gross loans stood at an absolute minimum of 0.05%. We expanded our physical 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 mission 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.

Speaker #3: The branch productivity efficiency per branch improved significantly, with average gold loan AUM per branch increasing by 40% year-on-year to ₹32.47 crore per branch. The asset quality remains stellar; credit losses on gross loans stood at an absolute minimum of 0.05%.

Speaker #3: We expanded our physical 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 mission of building a diversified non-banking financial services company.

Speaker #3: Muthoot Money Limited witnessed exponential growth. Loan AUM grew by 111% year-on-year to ₹10,550 crore, driven primarily by the strong growth of its gold loan portfolio.

Speaker #3: Total revenue surged 137% year-on-year to ₹511 crore, and profit after tax increased by 366% to ₹172 crore. Asset quality improved further, with stage-3 assets declining to 0.67%.

George Alexander Muthoot: The total revenue surged 137% year-on-year to INR 511 crores and profit after tax increased by 366% to INR 172 crores. Asset quality improved further, with Stage 3 assets declining to 0.67%. Belstar Microfinance showed strong recovery and profitability, delivering a profit after tax of INR 66 crores for this quarter compared to a net loss in the corresponding quarter last year. Loan AUM stood at INR 7,842 crores as industry-wide stress moderated disbursement growth. Following the regulatory enabling for MFIs to expand non-microfinance portfolio, Belstar opened 45 new gold loan branches in Q1 to diversify its product base. Muthoot Home Finance AUM grew by 13% year-on-year to INR 3,496 crores and profit after tax stood at INR 4 crores, marking a 114% year-on-year increase.

Speaker #3: Wellstar Microfinance showed strong recovery in profitability, delivering a profit after tax of ₹66 crore for this quarter, compared to the net loss in the corresponding quarter last year.

Speaker #3: Loan AUM stood at ₹7,842 crore as industry-wide stress moderated disbursement growth. Following the regulatory enabling for MFIs to expand the non-microfinance portfolio, Wellstar opened 45 new gold loan branches in Q1 to diversify its product base.

Speaker #3: Muthoot Home Finance AUM grew by 13% year-on-year to ₹3,496 crores, and profit after tax stood at ₹4 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 LKR 5,270 crores and profit after tax surging 113% year-on-year to LKR 43 crores.

George Alexander Muthoot: Asia Asset Finance, our Sri Lankan subsidiary, posted impressive performance, with AUM expanding 51% year-on-year to LKR 5,270 crores and profit after tax surging 113% year-on-year to LKR 43 crores. Muthoot Insurance Brokers generated a premium collection of INR 70 crores and achieved a profit after tax of INR 17 crores. To wrap up, we believe the regulatory changes implemented from April 2016 in the gold loan industry are structural positive. 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 omni-channel 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.

Speaker #3: Muthoot Insurance Brokers generated a premium collection of ₹70 crore and achieved a profit after tax of ₹17 crore. To wrap up, we believe the regulatory changes implemented from April 26 in the gold loan industry are structurally positive.

Speaker #3: 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.

Speaker #3: Coupled with our omni-channel 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.

Speaker #3: I now open the floor for your questions and look forward to an engaging discussion. Thank you.

George Alexander Muthoot: I now open the floor for your questions and look forward to an engaging discussion. Thank you.

Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone.

Operator 2: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone 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 will wait for a moment while the question queue assembles. The first question is from the line of Digant Haria from GreenEdge Wealth. Please proceed.

Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone 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 will wait for a moment while the question queue assembles. The first question is from the line of Digant Haria from GreenEdge Wealth. Please proceed.

Speaker #1: 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.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Deegant Harriera from Green Edge Wealth.

Speaker #1: Please proceed.

Speaker #2: 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 bips, and, you know, the a lot of other players which have reported have not really seen yield drop at all.

Digant Haria: Yeah. Hi, thank you for the opportunity. My question is that we have seen a very sharp drop in the yield this quarter, almost something like 300 bips. A lot of other players which have reported have not really seen yield drop at all. Just wanted to know, is this something based on the new strategy that we are targeting to compete with banks or what is it? Because this 300 bips seems a little high and not that suddenly competition had gone up in the last 3 months. Just some comments here, sir.

Speaker #2: So just wanted to know, like, is this, you know, something based on the new strategy that we are targeting, you know, to compete with banks, or, you know, what is it?

Speaker #2: Because this 300 bps seems a little, you know, high, and, you know, not that suddenly competition had gone up in the last three months.

Speaker #2: So just come comments yourself.

Speaker #3: Yeah, thank you. The yield in Q4 was 20.76, and this year, this quarter, it is 17.93. I agree there is a drop in the yield.

George Alexander Muthoot: Yeah. Thank you. Yeah, the yield in the Q4 was 20.76%, and 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 loans at lower rates also. Higher rates are also there, low rates are also there. Probably this quarter, some of the lower rate loans would have taken more precedence. Number 2, last year, Q3 and Q4, where we saw 20%, et cetera, yield was actually a very good year where our recoveries were also very good. There were a lot of loans which got renewed also. Renewed and rolled over last year.

Speaker #3: Due to a variety of reasons, like probably we have also reduced our interest rates in this quarter, or the yield because we are giving loans at lower rates also.

Speaker #3: 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.

Speaker #3: Number two, last year, third quarter and fourth quarter, where we saw 20%, etc., yield was actually a very good year where our recoveries were also very good.

Speaker #3: There were a lot of loans which got renewed also—renewed and rolled over—last year. So, till about last year, there were a lot of renewals, and the interest collections, etc., were very good. And that is also factoring into one of the reasons for that.

George Alexander Muthoot: Till about last year, there were a lot of renewals and the interest collections, et cetera, were very good, and that is also factoring to one of the reasons for that. Probably, as a steady state, maybe 18% to 18.5% should be the normal yield, which we should be looking at going forward also. What we have now is 18%, 17.93%. Probably going forward this year also, it should be 18%, et cetera. I think that is a decent yield. What we got last year should be considered as a windfall one time. Anyway, we were able to cash in on that. We have got the benefit of that. Going forward with new strategies, et cetera, to grow the gold loan book, et cetera, probably there was a determined effort to bring down the yield also.

Speaker #3: And probably as a steady state, 18 plus minus—maybe 18 to 18.5—should be the normal yield which we should be looking at going forward also.

Speaker #3: So what we have now is 18%, 17.93%. Probably, going forward this year also, it should be 18%, etc. So I think that's a decent yield.

Speaker #3: What we got last year should be considered as a windfall, a one-time windfall. So anyway, we were able to cash in on that. We have got the benefit of that.

Speaker #3: Going forward with the new strategies, etc., the new strategies to grow the gold loan book, etc.—probably there can be a... there was a concerted—there was a determined effort to bring down the yield also.

Speaker #3: So we have brought down the yield, but the AUMs will keep rising hereafter.

George Alexander Muthoot: We have brought down the yield, but AUMs will keep rising hereafter.

Speaker #2: Okay. Okay, sir. Okay, sir. Thank you. That was, you know, a very detailed explanation. Sir, my second question is that, you know, for this year also, now there is—see, these gold loan gold prices, which are volatile.

Digant Haria: Okay, sir. Thank you. That was a very detailed explanation. Sir, second question is for this year also, now there is this gold prices which are volatile. Second is we have these new guidelines which have started, the 75%, 80%, 85% LTV across life of the loans. Just wanted two questions here. One is your opening guidance for FY27. You generally give 15%. What would you like to give on the AUM side this year? Second is this gold loan product has generally been a product where customers don't like to pay monthly interest. It's more been a bullet product for as long as the 15, 16 years I have tracked this. At the branches, are we able to drive any change?

Speaker #2: 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.

Speaker #2: So, just wanted to ask two questions here. You know, one is your opening guidance for FY27—like, you generally give 15%. What would you like to give on the AUM side this year?

Speaker #2: And then second is that, you know, this gold loan product has generally been a product where customers don't like to pay monthly interest. You know, it's more been a bullet product for as long as the 15, 16 years I have, you know, tracked this.

Speaker #2: So, you know, at the branches, are we able to drive any change? Do we need to drive any change? And, you know, this is because the Stage 1 and Stage 2 loans may actually increase because of this regulation—not, you know, anything related to business.

Digant Haria: Do we need to drive any change or, because the Stage 1, Stage 2 loans may actually increase because of this regulation, nothing related to business, but yeah. Just your thoughts on these two things, sir.

Speaker #2: But, yeah. So, sir, your thoughts on these two things.

Speaker #3: Yeah, I think you are right in saying that, yes, the regulatory changes. So actually, in the first two months—April and towards the latter half of May—we were actually bringing in the new product.

George Alexander Muthoot: Yeah, I think you are right in saying that, yes, the regulatory changes. 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, et cetera. As you rightly said, we need to maybe retrain our staff and the customers to think of paying at least once in a quarter. If not monthly, once in a quarter. I think after some time, we are seeing good response from the customers there. Not that everybody is paying monthly, but if not monthly, two months or three months. That is what we are trying to implement, and I'm sure that will do well.

Speaker #3: We were training our staff also for the new product, new rates, new schemes—the 75%, 80%, 85% schemes, etc. And as you rightly said, we need to maybe retrain our staff and the customers to think of paying at least once in a quarter.

Speaker #3: If not monthly, once in a quarter. I think after some time, we are seeing a good response from the customers there. Not that everybody is paying monthly, but if not monthly, in two months or three months.

Speaker #3: So that is what we are trying to implement, and I'm sure that will do well. After May, we have seen very good traction in the AUM growth, and I don't want to give any guidance on that, but we will revise the guidance in the next quarter while we are reviewing the next quarter.

George Alexander Muthoot: After May, we have seen very good traction in the AUM growth, 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. AUM should keep growing, and I said the yield also should be in the range of 18%. That's what I think it should be in the coming quarters.

Speaker #3: We will revise the guidance. So, AUM should keep growing, and I said the yield also should be in the range of 18%. That's what I think it should be.

Speaker #3: In the coming quarters.

Speaker #2: Okay. Okay, sir. Thank you so much for these detailed answers. Thank you, and all the best.

Digant Haria: Okay, sir. Thank you so much for these detailed answers. Thank you, and all the best.

Speaker #1: Thank you. The next question is from the line of Kiran Engineer from CLSA. Please proceed.

Operator 2: Thank you. The next question is from the line of Kiran Engineer from CLSA. Please proceed.

Operator: Thank you. The next question is from the line of Kiran Engineer from CLSA. Please proceed.

Speaker #4: Yeah. Hi, sir. Congrats on the quarter, and thanks for taking my question. Firstly, just on this yield drop thing, I wanted to understand—there are no interest recoveries or any one-offs in this interest income number? Our top line was...

Kiran Engineer: Hi, sir. Congrats on the quarter, 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, our top line was-

Piran Engineer: Hi, sir. Congrats on the quarter, 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, our top line was-

Speaker #4: 75. You are right.

George Alexander Muthoot: Yeah. You are right. A lot of old loans which were there, we were able to recover a lot of interest there. That happened in the last two, three quarters. I think those are behind us now.

Speaker #3: A lot of old loans which were there, we were able to recover a lot of interest rates. That happened in the last two or three quarters.

Speaker #3: So, I think those are behind us now.

Speaker #4: Okay. So this is a clean interest income number. And we are looking to increase this slightly, as you said, to 18, 18 and a half percent.

Kiran Engineer: Okay. This is a clean interest income number. We are looking to increase this slightly, as you said, to 18% and 18.5%.

Piran Engineer: Okay. This is a clean interest income number. We are looking to increase this slightly, as you said, to 18% and 18.5%.

Speaker #3: Yeah. 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.

George Alexander Muthoot: Yeah. I didn't say that we are going to increase, but I think it should settle at that level. 18% and 18.5%. Yeah, sure.

Speaker #3: Yeah, sure.

Speaker #4: Understood. And just overall, in terms of disbursement LTV, now that the new norms are out, how has our average disbursement LTV changed with these new norms?

Kiran Engineer: Understood. Just overall, in terms of disbursement LTV now that the new norms are out, how has our average disbursement LTV changed with these new norms? Like for the entire disbursements done this quarter?

Piran Engineer: Understood. Just overall, in terms of disbursement LTV now that the new norms are out, how has our average disbursement LTV changed with these new norms? Like for the entire disbursements done this quarter?

Speaker #4: Like, for the entire disbursements done this quarter?

Speaker #3: Yeah, certainly. A very certain percentage of the customers are interested in the 85% with this below ₹2.5 lakh. But majority of them still continue to take 75%.

George Alexander Muthoot: Yeah. Certainly. A certain percentage of customers are interested in the 85% which is below INR 2.5 lakh. Majority of them still continue to take 75%. That range is what is still the disbursal rate. Not that everybody is taking 85%, et cetera. There are some people. 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 scheme is there. Of course, the LTV will get reduced because you have to factor in the next interest dues also for the next 12 months. Many combinations are there. People have got more choice, and that is why I said it took April and May for us to bring out good schemes, et cetera.

Speaker #3: That range is what is still the disbursal rate—not that everybody is taking 85%, etc. There are some people. But then the advantage is that we can offer a bouquet of products and a bouquet of choice to the customer.

Speaker #3: Somebody wants to pay monthly interest. Somebody wants to pay yearly interest. Yearly interest scheme is also there. But of course, the LTV will get reduced because you have to factor in the next interest payment dues also for the next 12 months.

Speaker #3: There are so many combinations available. People now have more choices, and that is why I mentioned it took January, April, and May for us to bring out good schemes, etc.

Speaker #3: I'm sure now the schemes have taken place, and we see good traction. So yes, I think to answer your question, the originating LTV has really not gone up.

George Alexander Muthoot: I'm sure now the schemes have taken place, and we see good traction. Yes, I think to answer your question, the originating LTV has really not gone up. That was your question, I suppose.

Speaker #3: That's your question, I suppose.

Speaker #4: But, sir, okay. Let me give an example. If somebody wants a 12-month loan of ₹2 lakh, at what LTV will you give? Will it be the same if he wants a bullet loan versus an EMI?

Kiran Engineer: Sir, okay, let me give an example. If somebody wants a 12-month loan, INR 2 lakh, at what LTV will you give? Will it be the same if he wants a bullet loan versus an EMI?

Piran Engineer: Sir, okay, let me give an example. If somebody wants a 12-month loan, INR 2 lakh, at what LTV will you give? Will it be the same if he wants a bullet loan versus an EMI?

Speaker #2: No, that is different. You know, so in case of a bullet payment, if it is 12 months, you have to reduce the interest accrual.

Oommen Mammen: No, that is different. In case of bullet payment, if it is a 12 months, you have to reduce the interest accrual. If it is less than INR 2.5 lakh, 85 minus interest accrual. Between INR 2.5 lakh and INR 5 lakh, it will be.

Speaker #2: So, if it is less than 2.5 lakhs, it's 85 minus interest accrual. Between 2.5 lakhs and 5 lakhs, it will be 85.

Speaker #3: Maybe what he will get is about 75% to 77% also.

George Alexander Muthoot: Maybe he will get about 75%, 77% or so.

Speaker #2: Yeah. And if it is a regular interest payment, you will get the 85, 80, and 75.

Oommen Mammen: If it is structure interest payment, you will get the 80% and 75%.

Speaker #4: But given that most of our customers don't—you know, they pay interest off and on. They don't pay it regularly. So do we just assume that all the loans are bullet loans and then do that 85 minus interest accrual?

Kiran Engineer: Given that most of our customers don't, they pay interest off and on. They don't pay it regularly. Do we just assume that all the loans are bullet loans and then do that 85% minus interest accrual?

Piran Engineer: Given that most of our customers don't, they pay interest off and on. They don't pay it regularly. Do we just assume that all the loans are bullet loans and then do that 85% minus interest accrual?

Speaker #4: That is the LTV number?

Speaker #2: Kiran, we have all the schemes present now, and, you know, that's what MD Sir was saying—that it will take some time for the employees to, you know, settle, and customers also to settle at a particular thing.

Oommen Mammen: Kiran, we have all the schemes present now, that's what MD sir was saying, that it will take some time for the employees to settle. Customers also to settle at particular thing. Mostly, we are seeing that customers are taking somewhere around 75%.

Speaker #2: Mostly, we are saying that, you know, customers are taking somewhere around 75 percent.

Speaker #3: So we have—you can pay monthly interest, you can pay once in three months, once in nine months, or once in 12 months. So we have different schemes.

George Alexander Muthoot: You can pay monthly interest. You can pay once in 3 months, once in 9 months, once in 12 months. We have different schemes, but then LTV will be different in many of these things. If you actually do that something. If somebody is prepared to pay the monthly interest, then if it is a loan is below INR 200 a flat, he can get all the 85%.

Speaker #3: But then LTV will be different in many of these things. If you have to deduct something, if somebody is paying prepared to pay the monthly interest, then if it is a loan is below 2 and a half lakh, he can he can get all the 85%.

Speaker #4: Understood. And, sir, what would the difference in the interest rate be between a monthly interest loan and a bullet loan as of today?

Kiran Engineer: Understood. Sir, what would the difference in the interest rate be between a monthly interest loan and a bullet loan as of today?

Piran Engineer: Understood. Sir, what would the difference in the interest rate be between a monthly interest loan and a bullet loan as of today?

Speaker #3: You know, it is not linked to interest, etc. It is not at all linked. Just because he's agreed to pay monthly, or he's paying only once in 12 months, there is no interest difference, etc.

George Alexander Muthoot: No, it is not linked to interest, et cetera. It is not at all linked. Just because he's agreed to pay monthly or he's paying only once in 12 months, there is no interest difference, et cetera. Schemes have different interest. It is not based on the repayment promise of one month and 3 months and 12 months.

Speaker #3: But schemes have different interest rates. Now, it is not based on the repayment promise of one month, three months, or 12 months.

Speaker #4: And, okay. Understood. And just lastly, sir, this quarter we've again turned around in terms of customer growth. The last two quarters it was declining.

Kiran Engineer: Okay. Understood. Just lastly, sir, now this quarter, we've again turned around in terms of customer growth. Last 2 quarters it was declining. What factors do you think led to this pickup in customer count or tonnage growth this quarter?

Piran Engineer: Okay. Understood. Just lastly, sir, now this quarter, we've again turned around in terms of customer growth. Last 2 quarters it was declining. What factors do you think led to this pickup in customer count or tonnage growth this quarter?

Speaker #4: What factors do you think led to this pickup in customer count or tonnage growth this quarter?

Speaker #3: Customer count—definitely newer customers are coming. But tonnage growth is actually what I always say, the gold price. When the gold price falls, the tonnage goes up because he has to bring more gold in today.

George Alexander Muthoot: Customer count, definitely newer customers are coming, but tonnage growth is actually what I was always saying, the gold price. When the gold price falls, the tonnage goes up because he has to bring more gold into it. If the price was high, he brings only lesser quantity of gold. That's what I have been trying to tell last four quarters. I think people now will start understanding. If the gold price falls, the tonnage will keep on increasing because somebody who wants INR 1 lakh earlier need to give 10 grams, now he has to give 12 grams. Simple as that.

Speaker #3: If the price was high, he brings only a lesser quantity of gold. That's what I have been trying to tell the last four quarters, but I think people now will start understanding.

Speaker #3: If the gold price falls, the tonnage will keep on increasing because somebody who wanted ₹1 lakh earlier needed to give ₹10 crore; now he has to give ₹12 crore.

Speaker #3: Simple as that.

Speaker #4: Understood. Understood. Yes, sir. Okay, that's it from my end. Thanks, and wish you all the best.

Kiran Engineer: Understood. Yes, sir. Okay. That's it from my end. Thanks. Wish you all the best.

Piran Engineer: Understood. Yes, sir. Okay. That's it from my end. Thanks. Wish you all the best.

Speaker #1: Thank you. The next question is from the line of Shripal Doshi from Aquarius. Please proceed.

Operator 2: Thank you. The next question is from the line of Shreepal Doshi from Equirus. Please proceed.

Operator: Thank you. The next question is from the line of Shreepal Doshi from Equirus. Please proceed.

Speaker #3: Hi, sir. Thank you for giving me the opportunity. So my question was on the product side. Are we still continuing with the vanilla gold loan product, or have we also launched new products on the income-generating segment front?

Shreepal Doshi: Hi, sir. Thank you for giving me the opportunity. Sir, my question was on the product side. Are we still continuing with the vanilla gold loan product, or we've also launched new products on the income-generating segment front?

Speaker #2: Yeah, I think we have—our CEO was saying that we have different products: a monthly interest product, an income-generating product, and products for less than ₹2.5 lakhs.

George Alexander Muthoot: Yeah, I think our CEO was saying that we have different products, monthly interest product, income generating product, less than 200,000. Actually, today a bouquet of products are there and too many people are spoiled for choice today.

Speaker #2: Actually, today a bouquet of products is 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.

Shreepal Doshi: No, the income generating loans just to take advantage of LTV, we have not launched.

Speaker #2: 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.

George Alexander Muthoot: Yeah.

Shreepal Doshi: 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. I believe with the correct way, we will be starting it soon.

Speaker #2: That may lead to problems. Many companies have started. I believe, with the correct approach, we will be starting it soon.

Speaker #3: So, not just because somebody says his loan is income-generating, we can't classify it as income-generating. We have to assess it—repayment capacity, etc.—and then approve the loan.

George Alexander Muthoot: Not just because somebody says it is a income generating loan, we can't give an income generating. We have to assess it, repayment capacity, et cetera, and then give. If we bypass that, we will fall in a problem.

Speaker #3: If you bypass that, we will fall into a problem.

Speaker #2: Right, right. Got it, sir. So basically, we will plan to launch there, and we can look at end use as well as evaluate the income.

Shreepal Doshi: Right. Got it, sir. Basically, we will plan to launch there and wherein we can look at end use as well as evaluate the income. In that case, would we also comfortably give higher LTV or would we want to prudently manage it at below 85%?

Speaker #2: But then in that case, would we also comfortably give a higher LTV, or would we want to prudently manage it at, you know, 85%?

Speaker #3: We also give higher LTV, no problem. So we assess that if it's an 85% LTV and less than 2.5 lakhs, we take that risk because we see maybe 2%, 3%, or 5% of our portfolio will be there.

George Alexander Muthoot: We also give higher LTV, no problem. We assess the customer. If it's there, 85% LTV and less than 200,000, we take that risk because we see maybe 2%, 3%, or 5% of our portfolio will be there. It doesn't matter.

Speaker #3: Doesn't matter.

Speaker #2: Right. Right. Got it, sir. Got it. So the second question was on the tenure front. So while you know, you highlighted about the to the previous participant on the on the calculation side, but have we brought down the tenure to, let's say, 3 months, 6 months, for our gold loan product?

Shreepal Doshi: Right. Got it, sir. The second question was on the tenure front. While you highlighted about to the previous participant on the calculation side, have we brought down the tenure to, let's say, three months, six months for our gold loan product?

Speaker #3: I think I told you we have a 3-month product. We have a monthly interest product. We have a 6-month product, 9-month, and 12-month products.

George Alexander Muthoot: I think I told you, we have a three months product, we have a monthly interest product, we have a six months product, nine months, and 12 months. People can choose and take. When he chooses the longer term bullet repayment, the LTV has to be recalculated to a lower level. That's it.

Speaker #3: 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.

Speaker #2: Right. Right. Got it. So then, in that case, sir, are we seeing more interest because more interest for shorter tenure, and that is why, you know, the increase in GST as well? Because it's all interlinked from that recognition standpoint?

Shreepal Doshi: Right. Got it. In that case, sir, are we seeing more interest for shorter tenure and that is why the increase in Stage 2 as well because it's all interlinked from that recognition standpoint?

Speaker #3: No, no. Our interest calculations are not based on interest rates. I think that is not the case; it is because of tenure-based factors, etc.

George Alexander Muthoot: No. Our interest rates are not based on that. I think that is not something which is because of tenure-based, et cetera. It is based on many other factors, which I don't want to discuss now here.

Speaker #3: It is based on many other factors, which I don't want to discuss here now.

Speaker #2: Got it, sir. Got it. I'll take it offline, maybe. Thank you, sir. Thank you so much for answering my questions.

Shreepal Doshi: Got it, sir. I'll take it offline maybe. Thank you, sir. Thank you so much for answering my questions.

Speaker #1: Thank you. The next question is from the line of Vasundha Khurana from Aviva Life Insurance. Please proceed.

Operator 2: Thank you. The next question is from the line of Vasantha Khurana from Aviva Life Insurance. Please proceed.

Operator: Thank you. The next question is from the line of Vasantha Khurana from Aviva Life Insurance. Please proceed.

Speaker #5: Hi, good afternoon. Thank you for the opportunity. Sir, I wanted to check if a rating upgrade is in the offing? Are there any discussions with the rating agencies regarding an upgrade?

Vasantha Khurana: Hi, good afternoon. Thank you for the opportunity. Sir, I wanted to check if a rating upgrade is in the offing. Are there any discussions with the rating agencies regarding an upgrade?

Vasudha Khurana: Hi, good afternoon. Thank you for the opportunity. Sir, I wanted to check if a rating upgrade is in the offing. Are there any discussions with the rating agencies regarding an upgrade?

Speaker #3: Yeah. First of all, thank you for attending the call on a Saturday. We we we are we work, but I am I am happy that some analyst people are also working.

George Alexander Muthoot: First of all, thank you for attending the call on a Saturday. We work, but I am happy that some analyst people are also working. To answer your question, I think CFO will answer the question.

Speaker #3: To answer your question, I think the CFO will respond to that.

Oommen Mammen: Hello. Glad that you asked. I hope analysts from CRISIL and ICRA are also there on the call and they are listening to it.

Speaker #2: Glad that you asked. I hope not. No analyst from Chris Hill, and Iqra are also there on the call. They are listening to it.

George Alexander Muthoot: They may answer. We always have our hopes and our expectations, but again.

Speaker #3: They may answer. You know, we always have our hopes and our expectations, but again, it is with, as humans said, it is with Iqra and the rating agency.

Vasantha Khurana: Okay

Vasudha Khurana: Okay

George Alexander Muthoot: As woman said, it is with the ICRA rating agency, probably.

Speaker #3: Probably, they should see good things happening now.

Vasantha Khurana: Okay.

Vasudha Khurana: Okay.

George Alexander Muthoot: They should see good things happening now.

Speaker #5: Okay. Thank you.

Vasantha Khurana: Okay. Thank you. No discussions that have happened and it's entirely that the management may have had with the agencies regarding this? Or can we expect that sometime in the future?

Vasudha Khurana: Okay. Thank you. No discussions that have happened and it's entirely that the management may have had with the agencies regarding this? Or can we expect that sometime in the future?

Speaker #1: So, no discussions or—no, okay. So, no discussions that have happened, and it's, you know, entirely that the management may have had with the agencies regarding this, or can we expect that sometime in the future?

Speaker #3: Clearly, 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.

George Alexander Muthoot: Every six months we engage with them.

Vasantha Khurana: Okay.

Vasudha Khurana: Okay.

George Alexander Muthoot: 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.

Speaker #5: Right, sir. Okay, sir. Thank you.

Vasantha Khurana: Right, sir. Okay, sir. Thank you.

Vasudha Khurana: Right, sir. Okay, sir. Thank you.

Speaker #1: Thank you. The next question is from the line of K. Shivakumar from ICICI Pension Fund. Please proceed.

Operator 2: Thank you. The next question is on the line of K. Sivakumar from ICICI Pension Fund. Please proceed.

Operator: Thank you. The next question is on the line of K. Sivakumar from ICICI Pension Fund. Please proceed.

Speaker #6: Yeah, thank you for the opportunity. Good afternoon, sir. Sir, my question is with regard to the increasing competition in the segment. We are seeing—of course, we have seen—the competition from the banks.

K. Sivakumar: Yeah. Thank you for the opportunity. Good afternoon, sir. Sir, my question is with regards to the increasing competition in the segment. Of course, we have seen the competition from the banks. We have dealt with that in the past. Now increasingly, most of the major NBFCs are also increasingly focused on the gold loan segment. Will there be any change in strategy in-house in terms of interest rates or the way you branch out the network in terms of how you will deal with the increasing competition from other NBFCs?

Speaker #6: We have done that. We have dealt with that in the past. But now, increasingly, most of the major NBFCs are also focusing on the gold loan segment.

Speaker #6: So, will there be any change in strategy in-house in terms of interest rates, or the way you branch out the network, in terms of how you will deal with the increasing competition from other NBFCs?

Speaker #3: Yeah. Competition from total NBFC business today is only ₹4 lakh crore. Total bank gold loan is ₹16 lakh crore. So where is ₹16 lakh crore?

George Alexander Muthoot: Yeah. Total NBFC business today is only INR 4,00,000 crores. Total bank gold loan is INR 16,00,000 crores. Where is INR 16,00,000 crores, where is INR 4,00,000 crores? Anyway, from NBFCs, et cetera, we don't have a separate strategy for any NBFCs. With all the competitions, whether it is bank or NBFC, we have the same good customer service, quick service, and customers generally feel that Muthoot is the right place to come for a gold loan. That is what has been our brand, our strength. Muthoot has always been in the forefront of marketing the concept of gold loans. People definitely refer to that feel that Is there. Competition will come. There is no special strategy for competition. We'll do our best. Our customer service will be the best. We will do all that is necessary.

Speaker #3: Where is ₹4 lakh crore? Anyway, from NBFCs, etc., we don't have a separate strategy for any NBFCs. But with all the competition, whether it is banks or NBFCs, we have the same good customer service, quick service, and customers generally feel that Muthoot is the right place to come for a gold loan.

Speaker #3: That is what has been our brand, our strength. Muthoot has always been at the forefront of marketing or marketing the concept of gold loans. So people definitely refer to that field, that this is there.

Speaker #3: So, competition will come. There is no special strategy for competition. We'll do our best; our customer service will be the best. We will do all that is necessary.

Speaker #3: But probably, as I was saying in the beginning also, probably the we may see some yield compressions, etc. But then we what we have earlier maybe 20%, etc., we said it will be around 18 plus.

George Alexander Muthoot: Probably, as I was saying in the beginning also, probably we may see some yield compressions, et cetera. What we had earlier, maybe 20%, et cetera, we said it will be around 18 plus. That's still a decent yield for us because we have the legacy book and legacy portfolio. The new players who are coming will have to contend with low interest rate schemes to compete with banks. They have also to compete with banks, to compete with others also. We, having a legacy portfolio with us, legacy customers with us, we have some advantages there. These are some things which, as the quarters go, we will see the fittest will survive and the non-focused people will go. That is what we have always seen earlier also.

Speaker #3: So that's still a decent yield for us, because we have the legacy book and the legacy portfolio. The new players who are coming in will have to confront low interest rate schemes to compete with banks.

Speaker #3: 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.

Speaker #3: So these are some things which, as the quarters go, we will see the fittest will survive. And the non-focused people will—that is what we have always seen earlier also.

Speaker #3: People who are not fully focused or fully into this have just started a gold loan business just for the sake of starting a gold loan business. I don't think they will be able to sustain.

George Alexander Muthoot: People who are not fully focused or fully into this, have just started a gold loan business just for starting a gold loan business, I don't think they will be able to sustain. Somebody who is keen fully with the gold loan, like Muthoot, probably we have an opportunity there. Let us wait for the next few quarters to see what is going to happen.

Speaker #3: But somebody who is keenly following the gold 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.

Speaker #6: Got it, sir. Sir, in terms of geographical focus, South still holds 49% of your total AUM. So, going forward, how much scope of growth do you see from the other more recent areas, like Eastern India and Northern India?

K. Sivakumar: Got it, sir. Sir, in terms of geographical focus, South is still 49% of your total AUM. 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? Thank you.

Speaker #6: 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?

Speaker #6: Thank you.

Speaker #3: No, no. See, the gold loan business is growing everywhere. In the South, it's just that it started much earlier, maybe a few decades earlier—it started in the South.

George Alexander Muthoot: No. The gold loan business is growing everywhere. It is just that South, it started much earlier, maybe a few decades earlier, started in South. People of South are more prone to gold, are more comfortable with a gold loan. That comfort is generally catching up in other states also, North, East and West. Our geographical location of charting a loan, we are present everywhere. There is 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 Jaipur or Delhi or Jalandhar, et cetera. We have a branch there. We have regional offices there.

Speaker #3: So, people of the South are more prone to gold and are more comfortable with their gold loans. That comfort is generally catching up in other states also.

Speaker #3: North, East, and West—our geographical location or starting a loan, we are present everywhere. There is 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.

Speaker #3: We will add more branches in Lucknow, or Jaipur, or Delhi, or Jalandhar, etc. So we have a 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.

George Alexander Muthoot: Wherever we see a business opportunity, we have an ear to the ground in all these places because we have marketing and sales people and also our field people working. They know where the potential is, and then we open branches there. There is no geography we have left out. As you said, South is concentrated more because the business also is more in South. If you look at the statistics of gold loans, 70% of the gold loan business is from South, even for banks. 30% only from all the others. South had a head start in gold loan business, whether it is banks or NBFCs. It still continues, but there is potential in both places. 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.

Speaker #3: So they know where the potential is, and then we open branches there. There is no geography we are left out of. But as you said, the South is concentrated more, because the business also is more in the South.

Speaker #3: If you look at the statistics of gold loans, 60% to 70% of the gold loan business is from the South, even for banks. Only 30% is from all the others.

Speaker #3: So how South had a head start in the gold loan business, whether it is banks or NBFCs, still continues. But there is more potential in both places.

Speaker #3: So, answering your question, we will be opening branches wherever there is potential or wherever we see there is scope for getting more new business.

Speaker #6: Got it, sir. And one last question, if I may chip in. What is your plan for Bellstar? Because even after so many years, I think we are still underperforming in terms of potential there.

K. Sivakumar: Got it. Sir, one last question, if I can chip in. What is your plan for Belstar? Because even after so many years, I think we are under-growing in terms of the potential there. We are just at INR 7,800 crores. 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? Thank you.

Speaker #6: We are just at ₹7,800 crore. And now that we are seeing that the microfinance segment has stabilized across the country, will you start getting aggressive in terms of loan growth over there?

Speaker #6: Thank you.

Speaker #3: I I to answer first your question, we we would we would want to be aggressive in microfinance. That's the first question. First answer. The second is we would like to have a very calibrated less risky portfolio and we have actually trained our we will instructions to the Bellstar team to do selected good quality customers.

George Alexander Muthoot: To answer first your question, we would want to be aggressive in microfinance. That is the first answer. The second is, we would like to have a very calibrated, less risky portfolio, and we have actually trained or given instructions to the Belstar team to do microfinance only with selected good quality customers, not just for the sake of. Microfinance, one quarter you will see doing well. Next quarter, you will see something else happening. After three quarters, you will see something else. It is like that. It is a cyclical business, et cetera. We have been trying to take advantage or trying to use the facility of the 40% other loans by doing gold loans also there. Today, we have 100 plus branches opened and probably another 50 in the next 3 months to do exclusively gold loan, and they have started. They are doing well.

Speaker #3: Not just for the sake of it, see, microfinance—one quarter you will see it's doing well, next quarter you will see something else happening, and after three quarters you will see yet another situation.

Speaker #3: So, it is like that. It is a cyclical business, etc. But we have been trying to take advantage, or trying to use the facility of the 40% other loans, by doing gold loans also there today.

Speaker #3: We have opened 100-plus branches and maybe another 50 in the next three months, dedicated exclusively to gold loans. They have already started and are doing well.

Speaker #3: So, we'll have a mix of secured lending and unsecured lending. Secured lending, as a policy, we would like—it's unsecured lending, microfinance.

George Alexander Muthoot: We'll have a 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 AUM, because we don't want to show anybody that we need to do a lot of AUM, et cetera. If it is low, it is low.

Speaker #3: We would like to give only to better, good quality customers, not for the sake of AUM, because we don't want to show anybody that we need to do a lot of AUM, etc.

Speaker #3: If it is low, it is low.

Speaker #6: Got it, sir. Thank you. That's it from my side.

K. Sivakumar: Got it, sir. Thank you. That's it from my side.

Operator 2: Thank you. The next question is from the line of Raghav Garg from Ambit Capital. Please proceed.

Operator: Thank you. The next question is from the line of Raghav Garg from Ambit Capital. Please proceed.

Speaker #1: Thank you. The next question is from the line of Raghav Garg from Ambit Capital. Please proceed.

Speaker #6: Sir, good afternoon, and thanks for the opportunity. I have two questions. One, I was going through your last quarter transcript, which was under 14%.

Raghav Garg: Sir, good afternoon, and thanks for the opportunity. I have two questions. One, I was going through your last quarter transcript, which was as of 14th-

Speaker #3: It is not loud, please. This is not loud.

George Alexander Muthoot: Please speak a little more louder, please. Little more louder.

Speaker #6: Can you hear me now? Am I audible?

Raghav Garg: Am I audible now?

Speaker #3: Yeah, better, better.

George Alexander Muthoot: Yeah, better.

Speaker #6: Okay, sir. I was going through your last quarter transcript, which was under 14th May, and at that time you had indicated that you did not see the need to lower your yields from then 20%.

Raghav Garg: Okay. Sir, I was going through your last quarter transcript, which was as of 14 May, and at that time you had indicated that you did not see the need to lower your yields from then 20%. 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%. Is that understanding correct? If yes, can you tell me what is the average yield for the month of June or maybe July? That is my first question.

Speaker #6: 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%.

Speaker #6: So, is that understanding correct? And if yes, then can you tell me what is the average yield for the month of June or maybe July?

Speaker #6: That's my first question.

Speaker #3: Sir, Raghav, no, there are a couple of things as MDS has said. You know, last year was an extraordinary year where we saw the gold prices increasing.

Oommen Mammen: Raghav, there are a couple of things, as MP sir said. Last year was an extraordinary year where we saw the gold prices increasing, top-ups happening. We were able to do most of the recovery collections without needing to give any discount to the customers or auctioning of large amounts of gold under recovery, et cetera. That is one thing. Then there was NPA accounts. We could collect most of the full income. Third, the ARC investment receipts, because their principal recovery has happened, the remaining amount was coming into the P&L. Specifically, the Q3 and Q4, we saw a large amount of renewals happening, especially because the new regulatory regime was kicking in from 1 April. We encouraged also these customers to do rollover top-ups, et cetera. Most of the loans, as you know that we follow a rebate structure.

Speaker #3: You know, top-ups are happening. So, we are able to do most of the recovery collections without needing to give any discounts to the customers or auctioning large amounts of gold under recovery, etc.

Speaker #3: So that is one thing. Then there was, you know, NP accounts — you know, we could collect most of the full income. Third, the ARC investment receipts — we are directly, you know, because the entire principal recovery has happened, the remaining amount was coming into the P&L.

Speaker #3: Now, specifically, you know, in the third and fourth quarters, we saw a large amount of renewals happening, especially because the new regulatory regime was kicking in from April 1st.

Speaker #3: So, we encouraged also these customers to do rollovers, top-ups, etc. So most of the loans, you know, as you know, we follow a rebate structure, you know.

Speaker #3: So, a lot of these loans, you know, because of their ability to roll over, are standing at a lower yield structure currently. Probably, they will increase to migrate to higher levels.

Oommen Mammen: 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 higher levels. That is an important factor which has also resulted in a yield gain. Then, as MP sir said, some reductions we have done in the Q1. Then probably last year-

Speaker #3: So that is an important factor, you know, which has also resulted in a yield need. Then, you know, as MDS has said, you know, some reductions we have done in, you know, in the first quarter.

Speaker #3: Then probably last year.

Speaker #6: How much would the reductions have been? How much would they have been?

Raghav Garg: How much would have the reduction been?

Oommen Mammen: We have taken some advantage of the increased gold prices in the Q4. Those incomes are not there in the Q1. Yeah, go ahead, please.

Speaker #3: Increased gold prices in the fourth quarter—those incomes are not there in the first quarter. Yeah, go ahead, please.

Speaker #6: 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 if you can help us with the yields in the June in the month of June.

Raghav Garg: I was just saying that how much have the reductions been? 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. If you can help us with the yields in the month of June, that will be very helpful.

Speaker #6: But that will be very helpful.

Speaker #3: So, we don't have any, you know, bifurcation as for June, and, or you know, you need to understand, you know, what led to this.

Oommen Mammen: We don't have any bifurcation as for June. You need to understand what led to this. These are all the reasons why it leads to it. We don't have an exact breakup because of this or what happened in June, et cetera, what is the interest income.

Speaker #3: So these are our reasons why. So we don't have an exact breakup because of this or, you know, what happened in June, etc. What is the interest income?

Speaker #6: 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?

Raghav Garg: Sure. 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 7 bits quarter on quarter.

Speaker #6: It's up about 7 bps quarter on quarter.

Speaker #3: You know, so I'm not expecting any reductions in cost of borrowing. It will mostly remain at these levels. You know, depending upon RBA policies, it might it can go up, you know, it all depends on how RBA is going to, you know, look at revising the benchmark rates.

Oommen Mammen: I'm not expecting any reductions in the cost of borrowing. It will mostly remain at these levels. Depending upon RBI policies, it can go up. It all depends on how RBI is going to look at revising the benchmark rates.

Speaker #6: Understood. Maybe another five, seven bps, ten bps? Any ballpark number, whatever?

Raghav Garg: Understood. Maybe another five, seven bits, 10 bits, any ballpark number, whatever.

Speaker #3: It doesn't matter much in a business where, you know, generating a 5% plus ROE.

Oommen Mammen: It doesn't matter much in a business where you're generating a 5% plus ROE.

Speaker #6: Of course. Thanks a lot for all those answers. Thank you.

Raghav Garg: Of course. Thanks a lot for all those answers. Thank you.

Speaker #1: 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.

Operator 2: 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.

Operator: 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.

Speaker #1: The next question is from the line of Rajiv Mehta from Yes Securities. Please proceed.

Speaker #3: 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.

Rajiv Mehta: Yeah, hi, good evening. You said that there is no interest difference between a customer paying quarterly or paying semiannually or paying annually. You said that the pricing will vary across schemes. What do you mean by schemes, and what is the pricing range difference across schemes on a per month basis or an annual basis? What are the different lending rates or structure that we are offering, and what is the price range right now through the branches here?

Speaker #3: 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?

Speaker #3: I mean, on a per month basis or an annual basis, what are the, you know, different lending rates or structures that we are offering, and what is the price range?

Speaker #3: You know, on right now, through the branches, yeah.

George Alexander Muthoot: Many of these things which you asked is there in our website, I don't want to go into the granular details of how we collect it on a public forum like this. I think that is what.

Speaker #4: Many of these things which you asked are there on our website. But I don't want to go into the granular details of how we collect it on a public forum like this.

Speaker #4: So I think that is what.

Speaker #3: I just want clarification. Sir, whereas a customer will pay you quarterly, semi-annually, or maybe annually also interest, but the principal payment comes at the end of the term of the loan, right?

Rajiv Mehta: Just one clarification. Sir, whereas the customer will pay you quarterly, semiannually or maybe annually also interest, the principal payment comes at the end of the term of the loan, right? The term of the loan remains 12 months.

Speaker #3: And the term of the loan remains 12 months.

Speaker #4: We have 12-month loans. We have 9-month loans. We have 3-month loans. We also have monthly interest loans.

George Alexander Muthoot: We have 12 months loan.

Rajiv Mehta: Yes.

George Alexander Muthoot: We have 9 months loan.

Rajiv Mehta: 9 months loan.

George Alexander Muthoot: We have 3 months loan. We have monthly interest loans also.

Speaker #3: EMI also.

Raghav Garg: EMI also.

Oommen Mammen: EMI also.

Rajiv Mehta: EMI also.

Speaker #4: EMI also.

George Alexander Muthoot: We have EMIs also. Yeah, EMI loans also.

Speaker #3: EMIs also. Yeah, EMI loans also. But were these recently introduced, or were they always there?

Rajiv Mehta: Okay, were these recently introduced, or they were always there?

Speaker #4: Yeah, all these things were introduced from 1st of April.

Oommen Mammen: Yeah, all these things were introduced from first of April.

Speaker #3: 1st of 1st of April. 1st of April, no? Okay. Yeah, yeah. And 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, you know, retain old customers?

George Alexander Muthoot: 1st of April.

Rajiv Mehta: 1st of April. Okay. Yeah. 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. How are you driving your branches to acquire more customers, retain old customers? I'm sure there will be a lot of pressure on competitors also to take over your customer. 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?

Speaker #3: Because I'm sure there will be a lot of pressure on competitors also to take over your customers. So how are we driving our branches to ensure that we get good volume growth in a year when gold prices could be largely stable?

Speaker #4: Most of these are internal strategies. We have strategies to retain our customers. There are strategies to get customers, etc. Again, we will have to only demonstrate that in our performance.

George Alexander Muthoot: Most of these are internal strategies. We have strategies to retain our customers, we have strategies to get customers, et cetera. Again, we'll have to only 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. It is not a function of the gold price that the business is growing. The business is growing because there is need for funding. That is something which I have been telling for the last several quarters, but people sometimes refuse to understand that. It is not that 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 sell it off. Instead of selling, if he's borrowing means he is wanting to repay.

Speaker #4: 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.

Speaker #4: The business is growing because there is a need for funding. So, that is something which I have been telling for the last several quarters. But people sometimes refuse to understand that.

Speaker #4: Refuse to understand that. So, it is not just because I have a high gold price that I'm going to borrow big money. I'll borrow only if I feel that I can repay it.

Speaker #4: Otherwise, he'll sell it off. So, instead of selling it, he's borrowing—meaning he wants to repay. So, we have our strategies for all these things, all these competitions, etc.

George Alexander Muthoot: We have our strategies for all these things, all these competitions, et cetera, and I'm sure in the next quarter you'll see good growth in AUMs also.

Speaker #4: And I'm sure in the next quarters you'll see good growth in AUMs also.

Speaker #3: Got it. Thank you so much, sir.

Rajiv Mehta: Got it. Thank you so much, sir.

Speaker #1: Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you restrict yourself to two questions per participant and rejoin the question queue if you have further queries.

Operator 2: 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 Nidhesh Jain from Investec. Please proceed.

Operator: 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 Nidhesh Jain from Investec. Please proceed.

Speaker #1: The next question is from the line of Nitesh Jain from Investech. Please proceed.

Speaker #3: 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.

Nidhesh Jain: Thanks for the opportunity. Sir, first question is on LTV. What is our LTV as of June, including accrued interest?

Oommen Mammen: It will be around 65 or 66.

Speaker #4: 66.6, I think. 66%.

George Alexander Muthoot: 66.6, I think, sir. 66%.

Speaker #3: Okay. That includes accrued interest also, right?

Nidhesh Jain: Okay. This includes accrued interest also, right?

Speaker #4: Yeah, yeah.

George Alexander Muthoot: Yes.

Speaker #3: Okay. And second, what gives you confidence that our yields will be stabilizing at 18? Because in one quarter, we have seen a 300 basis point decline in yields.

Nidhesh Jain: Okay. Second is, what gives you confidence that our yields will be stabilizing at 18? 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. The large part of the book, say 40% to 50% of the book will still come for renewal in coming quarters. What gives you confidence that it will stabilize at 18 only when the new old book, which is at, let's say, 22%, will come for renewal? That is one. What is the incremental yields in Q1? When we have disbursed the loans, what is the incremental yields on those loans?

Speaker #3: And I I believe that in one quarter the entire book would 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.

Speaker #3: So, what gives you confidence that it will stabilize at 18% only when the new old book, which is at, let us do 22%, will come for renewal?

Speaker #3: That is one. And what are the incremental yields in quarter one when we have disbursed the loans? What are the incremental yields on those loans?

Speaker #4: So, I think as I said, generally the yield will be 18 to 18.5%. Incremental yields are a basket of yields. We have higher yields also.

George Alexander Muthoot: I think, as I said, generally, the yield will be 18.5. Incremental yields are a basket of yield. We have higher yield also, we have lower yield, et cetera. What gives me confidence is just my experience in the last 35 years in this company with gold loan. It gives me the experience to say what will happen, what will be the things, et cetera. That's what I should be referring to here.

Speaker #4: We have lower yield, etc. What gives me confidence is just my experience in the last 35 years in this company with gold alone. It gives me the experience to say what will happen, what will be the things, etc.

Speaker #4: So, that's what I should be referring to here.

Speaker #3: So, Nitesh, I know in the fourth quarter, as I said earlier, there have been a very large amount of renewals. Now, you know, one need not be too much concerned about this in the new scenario because we are rolling out mostly the shorter-end schemes.

Oommen Mammen: Nitesh, Q4, 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. Because it is a shorter end, we can always reprice at shorter intervals. That flexibility we are having, and based on that, we are fairly looking at a yield range of 18% to 18.5%.

Speaker #3: You know, suppose because it's a shorter end, you know, we can always reprice at a shorter intervals. So that flexibility we have having. And based on that, you know, we have fairly looking at an yield range of 8, 18 to 18 and a half percentage.

Speaker #3: Sorry, sir. And if you can share the data on incremental yields on gold loans for Q1, that would be helpful.

Nidhesh Jain: Sure, sir. If you can share the data on incremental yields on gold loans for Q1, that would be helpful.

Speaker #4: The yield last this quarter was 17.93%. Last quarter, it was 19.56%. Prior to that, it was 20.76%, and before that, 20.16%.

George Alexander Muthoot: The yields this quarter was 17.93, last quarter 19.56, previous to that 20.76, previous to that 20.16.

Speaker #3: So the current yield structure on the gold loan schemes, you know, as MDS has said, is there on the website. You know, we have n number of products, and the pricing for that.

Oommen Mammen: The current yield structure on gold loan schemes, as Nitesh has said, it is there in the website. We have a number of products and pricing for that.

Speaker #3: Sure. Sure, sir. And the last question is: what percent of disbursements are happening at 85% LTV? Ballpark number.

Nidhesh Jain: Sure, sir. The last question is, what % of disbursement are happening at 85% LTV? Ballpark numbers.

Speaker #4: Portfolio is very low, maybe 5% or so—around 4% to 5%.

George Alexander Muthoot: Very low. Maybe 5% or so. 4% to 5%.

Speaker #3: 4%. 4%.

Oommen Mammen: 4% actually.

Speaker #4: See, again, the 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'll be able to repay.

George Alexander Muthoot: See, again, the answer is the same. Everybody just doesn't borrow just because the price is there. They borrow only to the extent of what they feel they'll be able to repay. That is what people borrow. Otherwise, they will all go and sell this gold. Isn't it better to sell the gold than take 75 or 70 or 85? 85, your answer, 85 is just started maybe 3%, 4%.

Speaker #4: That is what people borrow. Otherwise, they will all go and sell this gold. Isn't it better to sell the gold than take 75, or 70, or 85?

Speaker #4: So, 85—your answer. 85 has just started, maybe 3 or 4%.

Speaker #3: 3%. Yeah. Sure, sir. Sure. Thank you, sir. That's it from my side then.

Oommen Mammen: 3%, yeah.

Nidhesh Jain: Sure, sir. Thank you. That's it from my side.

Speaker #1: Thank you. The next question is from the line of Gaurav Khande Elwal from JP Morgan. Please proceed.

Operator 2: Thank you. The next question is from the line of Gaurav Khandelwal from JP Morgan. Please proceed.

Operator: Thank you. The next question is from the line of Gaurav Khandelwal from JP Morgan. Please proceed.

Speaker #5: Hi, good evening. Thanks for taking my questions. I'm relatively new to the company, so what I'm just trying to understand is: in the last 20 years, the mix of loans in the South region has come down from 84% to almost 50% now.

Gaurav Khandelwal: Hi. Good evening. Thanks for taking my questions. I'm relatively new to the company. What I'm just trying to understand, in the last 20 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 10 years? If I can also get your views on, do you think that the penetration rates 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? Is it just a function of getting more business in other regions? Just wanted your thoughts around that, sir.

Speaker #5: Where do you see this going in the next 5 to 10 years? And if I can also get your views on whether you think the penetration rates of gold loans in Southern India are high?

Speaker #5: And hence, is there a need to shift to the North, or East, or West, or any other part outside of the South? Or is it just a function of getting more business in other regions?

Speaker #5: So just wanted your thoughts around that, sir.

Speaker #4: I think I answered the question earlier also, saying that the concept of gold loan was there much earlier in South India than in North India, or people were more aware of gold loans, and people started using gold loan as a product maybe a few decades back. Corporatized gold loans...

George Alexander Muthoot: I think I answered this question earlier also saying that South, the concept of gold 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. Corporatized gold loans maybe much earlier. That is why there is a head start in South India. North, East, and West is definitely catching up. Again, the credit should go to Muthoot for marketing the concept of gold loan in other than South. We were the pioneers in this. We were the people who introduced the gold loan as a business loan proposition to North India. Today, North India is also having lot of business. There is potential there. South India is only one-fourth of India. Three-fourth is North, East, and West. There is always potential there.

Speaker #4: Maybe much earlier. So that is why there is a head start in South India. But the Northeast and West are definitely catching up.

Speaker #4: And again, the credit should go to Muthoot for marketing the concept of gold loan in regions other than the South. We were the pioneers in this.

Speaker #4: We were the people who introduced the gold loan as a business loan proposition to North India. Today, North India is also having a lot of business.

Speaker #4: So there is potential there. South India is only one-fourth of India; three-fourths is Northeast and West. So there is always potential there.

Speaker #4: So, will we stop opening branches in South India? No. Because South India still has a lot of gold loan potential, and there is scope for more people.

George Alexander Muthoot: Whether we will stop opening branches in South India? No, because South India still has lot of gold loan potential, and there is scope for more people. North India definitely is less penetrated. It needs little more concept selling also in newer places. When concept selling also happens much better, North, East, and West will also start doing better.

Speaker #4: North India, definitely, it is less penetrated. It needs a little more concept selling also, in New York places. So when concept selling also happens, it will be much better.

Speaker #4: Northeast and West will also start doing better.

Speaker #3: Got it, sir. Thanks for that. So is it fair to say that in the next 5 to 10 years, there's some degree of potential possibility that the 50% South mix goes down to maybe 40% or even lower?

Gaurav Khandelwal: Got it. Thanks for that. Is it fair to say that in next five to 10 years, there's some degree of possibility that the 50% South mix goes down to maybe 40% or even lower?

Speaker #4: How is this 50% and 60% going to matter, sir?

George Alexander Muthoot: How does this 50% and 60% of North India matter, sir?

Speaker #3: See, Northeast and West is a larger geography. South is a small. Yeah. It's a it's only one fourth. So you know, it is not that South absolute you know, loan amount has come down.

Oommen Mammen: Northeast and West is a larger geography.

George Alexander Muthoot: One-fourth.

Oommen Mammen: Yeah, it's only one-fourth. It is not that South absolute loan amount has come down. Loan amount has grown up, Northeast and West has grown larger.

Speaker #3: Loan amount has grown up. But you know, Northeast and West have grown larger. So it...

Speaker #4: Again, it's a concept. When people start accepting gold, or gold loan, as a concept, it will all pick up in North India also.

George Alexander Muthoot: It's a concept. When people start accepting gold as a concept, gold loan as a concept, it will all pick up in North India also.

Speaker #3: Got it, thanks. And my second question is: What is it about regulations or competition that worries you most about the business? To your point, banks have always been there, and you've been competing with them for many decades now.

Gaurav Khandelwal: Got it. Thanks. My second question is, what is something on regulations or competitions that keeps you the most worried about business? To your point, banks have always been there and you've been competing with them for many decades now. What are top one or two things top of your mind, which keeps you worried about the business?

Speaker #3: But what are the top one or two things, top of your mind, which keep you worried about the business?

Speaker #4: There is nothing. There is no single thing that keeps us worried. It is just that we need to do better and better. We need to be one step ahead of everybody.

George Alexander Muthoot: There is nothing. There is no single thing, et cetera, keeps worried. It is just that we need to do better and better. We need to be one step ahead of everybody, competition. More than being one step ahead, we need to continue to get the customer's trust. This is a trust business, so we should continue to get the trust of the customers, then everything else is passe. Everything else is simple then.

Speaker #4: Competition. And more than being one step ahead, we need to we need to continue to continue to get the customers trust. This is a trust business.

Speaker #4: So we should continue to gain the trust of the customers. Then everything else is passé; everything else is simple then.

Speaker #3: Got it. Thank you so much. Those were all my questions.

Gaurav Khandelwal: Got it. Thank you so much. Those were all my questions.

Speaker #1: Thank you. The next question is from the line of Kushan Parekh from Morgan Stanley. Please proceed.

Operator 2: Thank you. The next question is on the line of Kushan Parikh from Morgan Stanley. Please proceed.

Operator: Thank you. The next question is on the line of Kushan Parikh from Morgan Stanley. Please proceed.

Speaker #3: Thank you for taking my questions. A 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.

Kushan Parikh: Thank you for taking my questions. A 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. My second question is on your branch addition plan. I see that you have added about 60 branches in the Q1 at the standalone level. If you could just lay out your branch addition plans for the standalone business for the full year as well as for Muthoot Money if I may. Those are my questions.

Speaker #3: And my second question is on your branch addition plan. So, I see that we have added about 60 branches in the first quarter at the standalone level.

Speaker #3: If you could just lay out your branch addition plans for the standalone business for the full year, as well as for Muthoot Money, if any.

Speaker #3: Yeah, those are my questions.

Speaker #4: So, no, ticket size above ₹3 lakh is 38%. ₹1 lakh to ₹3 lakh is 35%. And the branches we opened—it's 85 branches. Probably in this year, we should be opening another 500 to 600 branches.

Oommen Mammen: Ticket size above INR 3 lakh is 38%. INR 1 lakh to INR 3 lakh is 35%.

George Alexander Muthoot: Branches we opened is 85 branches. Probably, in this year, we should be opening another 500 to 600 branches. Overall in the group.

Speaker #4: Overall in the group.

Speaker #3: And specifically for standalone, if you could tell us, sir.

Kushan Parikh: Specifically for standalone, if you could tell us, sir.

Speaker #4: Standalone is Muthoot Finance.

George Alexander Muthoot: Standalone means Muthoot Finance?

Speaker #3: Yes, Muthoot Finance.

Kushan Parikh: Yes, Muthoot Finance.

Speaker #4: Maybe 200, 250 branches.

George Alexander Muthoot: Maybe 200 to 250 branches.

Speaker #3: Understood. Understood. That's all from my side. Thank you.

Kushan Parikh: Understood. That is all from my side. Thank you.

Speaker #1: Thank you. The next question is from the line of Bharat Shah from BCS Capital Idea Private Limited. Please proceed.

Operator 2: Thank you. The next question is on the line of Bharat Shah from BCS Capital Idea Private Limited. Please proceed.

Operator: Thank you. The next question is on the line of Bharat Shah from BCS Capital Idea Private Limited. Please proceed.

Speaker #3: Yeah. Hi. Thank you. Very clearly, competitive conditions have become far more intense than you might have probably felt just a few months back.

Bharat Shah: 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 RN. All of that seems to suggest that the competitive conditions probably have been more intense than you might have budgeted. When I look at even just the last quarter numbers, where we reported INR 3,400 crore of net profit, while our asset base has grown from the last quarter from INR 182,000 crore to INR 191 crore, but profits have come down by almost 16% to 17%. The profit of this quarter is equal to what we reported in Q4 at INR 2,825 odd crore.

Speaker #3: Because the yields have come down, the alternation and the architecture of the products is dramatically altered at our end. And all of that seems to suggest that the competitive conditions probably have been more intense than you might have budgeted. When I look at even just the last quarter numbers, where we reported ₹3,400 crore of net profit...

Speaker #3: While our asset base has grown from the last quarter, from ₹182,000 crore to ₹191,000 crore, profits have come down by almost 16–17%. And the profit of this quarter is equal to what we reported in the December quarter.

Speaker #3: At 2,825-odd gross. So, am I to understand that probably the current year overall is likely to be a bit of a washout as far as our performances?

Bharat Shah: 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? A washout in the sense of achieving any meaningful growth, not washout in any other sense. Any meaningful growth in the bottom line in the current year looks unlikely as I see it.

Speaker #3: 'Washout' in the sense of achieving any meaningful growth—not washout in any other sense. But any meaningful growth in the bottom line in the current year looks unlikely, as I see it.

Speaker #4: I think you have given both the question and the answer. So what do you need any answers from me for then? You already said the question.

George Alexander Muthoot: I think you have given the question and the answer also. You need any answers from me then? You said the question, you said the answer also.

Speaker #4: You said the answers.

Speaker #3: I want confirmation on whether I am thinking correctly or not.

Bharat Shah: I want the confirmation whether I am thinking correctly or not.

Speaker #4: See, no, don't use the word 'washout.' The company has made a profit of 2,500, which is almost like now a 6% ROA. Now, how many companies in India are making that kind of ROA?

Oommen Mammen: No, don't use the word washout. The company has made a profit of 2,500, which is almost like 6% ROE. How many companies in India is making that kind of ROEs? Still it is better. I think in the initial questions we explained in detail what led to that comparative profit quarter-on-quarter. From last year, we have suddenly there is 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. That explains this. We also gave the reasons of renewals, et cetera, 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.

Speaker #4: You know, still it is better. No, I think in the initial questions, we explained in detail, you know, what led to that, you know, comparative profit quarter on quarter.

Speaker #4: But from last year, we have suddenly seen an increase of almost 25% in profits. You know, we explained to you what are the reasons which are leading to a, you know, quarter-on-quarter decline.

Speaker #4: Because last year was an extraordinary year and quarter. So you know, that explains this. And you know, we also gave the reasons of, you know, renewals, etc., happened in the last quarter.

Speaker #4: Especially large amount of renewals has happened, which is leading to, you know, the, you know, the loans almost remaining at a lower slabs for a major portion of the quarter.

Speaker #4: And the shorter duration, which is leading to lower interest income. And, you know, I think we are fairly certain those extraordinary incomes are not going to be present in the current year.

Oommen Mammen: Which is leading to a lower interest income. I think those extraordinary incomes are not going to be present in the current year. I think we are fairly comfortable with the interest yield of around 18 and a half, which can generate a good, decent ROA.

Speaker #4: So, I think we are fairly comfortable with the, you know, interest yield of around 18–18.5%, which can generate a good, decent ROA.

Speaker #3: Ma'am, I limited it. I rectified myself. I used a completely wrong word—'washout.' And I quickly corrected it. That 'washout' was more in the sense of achieving growth.

Bharat Shah: No. Let me rectify myself. I used completely wrong word, wash out, I quickly corrected that wash out more in the sense of achieving growth. Over 20 years that I have seen Muthoot Finance, 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 20-year period that I've seen. This 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, I stand corrected. I didn't mean wash out in any other sense.

Speaker #3: Over the 20 years that I have seen Muthoot Finance, and I have been observing it year after year, it has consistently produced meaningful growth in the band of 15% to 20% year after year, over the 20-year period that I have seen.

Speaker #3: And this current year, it probably looks to me that, given the sharp drop in the yield, this year may not produce any meaningful growth in the bottom line.

Speaker #3: In that sense, of achieving any meaningful growth in the bottom line, I use that word. But I—I stand corrected. I didn't mean 'washout' in any other sense.

Speaker #3: But the profitability, in terms of absolute profits, probably may not grow by much—maybe by a single digit—is what it looks like to me.

Bharat Shah: That the profitability, the absolute profits probably may not grow, maybe by a single digit, is what it looks like to me in the current year. Which is below.

Speaker #3: In the current year, which is below.

Speaker #4: Yeah. Sir, we don't give any profit guidance. You know, what we generally give is guidance on AUM growth, because profits are secondary for us.

Oommen Mammen: We don't give any profit guidance. No. We generally give a guidance of AUM growth because profits are secondary for us. For us, 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 yearly results. Let's review the growth numbers we achieve till September end, and then accordingly we can give a revised guidance if it is nearer.

Speaker #4: For us, you know, loan growth is the primary factor. We believe that, you know, profits will follow. So we have given a guidance of 15%, you know, because considering that last year we had a good growth, you know, we also expect some revision to happen after the half-yearly results.

Speaker #4: So, let's review the growth numbers we achieved, you know, till September end. Then, accordingly, we can give a revised guidance if needed.

Speaker #3: 15% from the June base, you are seeing? From March, 26% to 15%. So, roughly about ₹210,000 crore or higher.

Bharat Shah: 15% from June base, you are saying?

Oommen Mammen: March 2024.

Bharat Shah: From March 2026 to 15%. Roughly about INR 210,000 crores or higher.

Speaker #4: So, the figures, sir. No, we had 1,50,000. Fifteen percent means it's almost like 17,000, 18,000.

Oommen Mammen: So-

George Alexander Muthoot: I don't know those figures, sir.

Oommen Mammen: No. We had 150,000. 15% means it's almost like 17,000, 18,000.

Speaker #3: No, no. I mean, our asset base was ₹1,82,000 crore as on March 2026. So 15% will mean about ₹3,15,000 crore. I'm talking consolidated.

Bharat Shah: No, no, I mean, our asset base was INR 182,000 crore is on March 2026. 15% will mean about INR 216 crore. I'm talking consolidated.

Speaker #4: Okay. Okay. Anyway, 15% is 15%.

Oommen Mammen: Okay. Yeah, okay. Anyway, 15% is 15%.

Speaker #3: Oh, okay. And which means we probably expense characteristic and cost of fund you clarified already. Therefore, the pattern probably in the quarters ahead will replicate based on the size of the business attained.

Bharat Shah: Okay. Which means we probably expense characteristic and cost of fund, you clarified already. Therefore, the pattern probably in the quarters ahead will replicate based on the size of the business, I think similar to what we've seen in June. That will be fair assumption to make, right?

Speaker #3: Similar to what we have seen in June, that would be a fair assumption to me, correct?

Speaker #4: So that's what I said. No, we don't generally get into the profit guidance. You know, we give a growth guidance. Let's see how that is panning out.

Oommen Mammen: That's what I said. No, we don't really get into the profit guidance. We give a growth guidance. Let's see how that spanning out.

Speaker #3: Okay. Okay. Thank you.

Bharat Shah: All right. Okay. Thank you.

Speaker #2: Thank you. The next question is from the line of Abhijit Debrewal from Motilal Oswal. Please proceed.

Operator 2: Thank you. The next question is on the line of Abhijit Tibrewal from Motilal Oswal. Please proceed.

Operator: Thank you. The next question is on the line of Abhijit Tibrewal from Motilal Oswal. Please proceed.

Speaker #3: Yeah, good evening, sirs, and thank 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, were all just trying to understand what is really happening with the yields, and how much of the recoveries in the interest income that we were reporting.

Abhijit Tibrewal: Good evening, sirs. Thank 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, we 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. I think, in the last three quarters, four quarters, we were all struggling given the expansion in yields, which you have explained already. There were recoveries and also explained there were renewals last quarter, which is why the loans are sitting at a lower rate given the rebate structure that you follow. Sir, again, just a humble request from my side. We are the largest gold loan company, almost a INR 1.25 trillion market cap.

Speaker #3: And I think, I mean, the last three quarters, four quarters, we were all struggling given the expansion in yields, which we have explained already, that they were recoveries, and also explained there were renewals last quarter.

Speaker #3: And, which is why the loans are sitting at a lower rate, given the rebate structure that you follow. So, sir, I mean, again, just a humble request from my side.

Speaker #3: We are the largest gold loan company. Almost a 1.25 trillion market cap. So I think it'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.

Abhijit Tibrewal: I think that's a fair ask when we asked you 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. Can you just articulate that for all of us? That will be very useful for everyone on the call.

Speaker #3: So just articulate that for all of us—that will be very useful for everyone on the call.

Speaker #4: So I think we gave the, you know, yield—it's, you know, 17.93%.

Oommen Mammen: I think we gave the yield is up 17.93%.

George Alexander Muthoot: Sir, this year the yield is 17.93%. Last quarter it was 19.56%. Previous to this is 20.76%. Previous to that is 20.16%. That's the yield. This year the yield is 17.93%. This quarter, sorry.

Speaker #3: The yield is 17.93%. Last quarter, it was 19.56%. Previous year, it was 20.76%. The year before that, it was 20.16%. That's the yield. So this year, the yield is 17.93%.

Speaker #3: So this quarter, sorry.

Speaker #4: So, sir, all the numbers that you mentioned just now – do they include the recoveries as well, or are these clean gold loan yields without any recoveries?

Abhijit Tibrewal: sir, all the numbers that you said just now, do they include the recoveries as well, or are these clean gold loan yields without any recoveries?

Speaker #3: This is all with recovery. What is recovery?

Oommen Mammen: This is all with recovery. What is recovery?

George Alexander Muthoot: This is all with recovery. What is recovery?

Speaker #4: This is what I'm asking.

Abhijit Tibrewal: That is the thing that I'm asking. Sir, recoveries from the NPA loans where you were able to recover the overdue interest.

Speaker #3: Sir, regarding recoveries from the NPA loans, were you able to recover the overdue interest?

Oommen Mammen: A different concept. NPA recoveries happens, rollovers when it happens. If it is at a higher slab, those recoveries happens

Speaker #4: A different concept. NPA recoveries happen, rollovers—you know, when it happens, if it is at a higher slab, those recoveries happen, you know.

Speaker #3: More old recoveries happened last year.

George Alexander Muthoot: More old recoveries happened last year.

Speaker #4: ARC receipts, you know, whatever is over and above that happens—auction, whatever has happened—you know, those incomes will be.

Oommen Mammen: ARC receipts, whatever is over and above that happens. Auction, whatever has happened, those incomes will be.

Speaker #3: All of those are included in the yield.

George Alexander Muthoot: All those are included in the yield.

Speaker #4: You know, the top-up charges we collect, that is also included. That will also come in. So, you know, those kinds of situations are, you know, not there in the first quarter.

Oommen Mammen: Top-up charges we collect, that also will come in.

George Alexander Muthoot: Okay

Oommen Mammen: Those kind of situations are not there in Q1. Additionally, we have also fine-tuned some of the rate structure in the light of the new regime. To that extent, there could be some impact also.

Speaker #4: And additionally, you know, 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.

Speaker #3: So, at steady state, we expect 80 to 85, 18 to 18.5% yield. Steady state. Got it, sir. Got it. And sir, this 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 200 to 300 basis points in one quarter?

George Alexander Muthoot: Steady state, we expect 18% to 18.5% yield. Steady state.

Abhijit Tibrewal: Got it, sir. Got it. Sir, which is where 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 200 to 300 basis points in one quarter?

Speaker #4: What, what, what do you need to understand is these are not long-term fixed rate contracts. You know, these are all short-term contracts. So there, you know, it all depends on, you know, and we are dealing with, you know, 100,000 customers a day.

Oommen Mammen: What you need to understand is these are not long-term fixed rate contracts. These are all short-term contracts. There, it all depends on We are dealing with 100,000 customers a day. There, these loan cycles are very short, and added to that, these kind of fluctuations impact the yield. As I said, profit is secondary. For us, the loan growth is important and how we take care of the customers. To that extent, we follow different policies at different points of time, which will have an impact on yield. We believe that 18% yield is something maintainable.

Speaker #4: You know, so these loan cycles are very short. And, added to that, you know, these kind of fluctuations impact the yields. Now, as I said, you know, profit is secondary.

Speaker #4: For us, loan growth is important, and so is how we take care of our customers. To that extent, we follow different policies at different points of time, which can have an impact on the yield.

Speaker #4: But we believe that, you know, 18% yield is something, you know, maintainable.

Speaker #3: Got it, Raman sir. And then the last question that I had was, I mean, just trying to understand whatever I have heard on this call until now, are we now planning to...

Abhijit Tibrewal: Got it, Raghunathan sir. The last question that I had was, just trying to understand whatever I heard on this call until now. Are we now planning to reaching the high competitive intensity which is there. I think N.D. sir used a few of the-

Speaker #3: High competitive intensity is there. I think MD sir used a few of the...

Speaker #4: I can hear you. Can you repeat the question? There was a break in between. Hello?

George Alexander Muthoot: We can't hear you. Your voice is-

Oommen Mammen: Can you repeat the question? There was a break in between.

Abhijit Tibrewal: Yes.

Oommen Mammen: Hello.

Speaker #3: Hi, sir. Is it, is it better now?

Abhijit Tibrewal: Hi, sir. Is it better now?

Speaker #4: Yeah, now we can hear you. Just repeat the question, the last question.

Oommen Mammen: Yeah.

George Alexander Muthoot: Now we can hear you. Just repeat the question. Last question.

Speaker #3: Yes, sir. All right. I was just trying to understand this, sir. I mean, whatever I have heard on this call, I think that we are now acknowledging the high competitive intensity that is there.

Abhijit Tibrewal: Yes, sir. All I was just trying to understand is, sir, 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, last couple of quarters, we’ve all been asking. To that end, what about changes you have done on the interest rate structure? Are you planning to aggressively compete now? The only thing really is that I heard N.D. sir say that, Let’s see who’s the fittest to survive.

Speaker #3: And I think—I mean, the last couple of quarters we have all been asking, and to that end, whatever changes you have done on the interest rate structure, are you planning to aggressively compete now?

Speaker #3: Only, the only thing here is that I heard MD sir say, "Let's see who's the fittest to survive. Let us wait for a few more quarters."

Abhijit Tibrewal: 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 everyone, every gold loan lender in the country starts cutting rates on gold loans and you’ll remember that time between maybe December 2022 to June 2023, where for us also the yields had declined by about 350 basis points. Can we get to a point in the next couple of quarters if everyone starts competing aggressively?

Speaker #3: Just trying to understand, can we, in the next two to three quarters, get to a point where, you know, every gold loan lender in the country starts cutting rates on gold loans? And you'll remember that time between, maybe, December 2022 to June 2023, where for us also, the yields had declined by about 350 basis points.

Speaker #3: So, can we get to a point in the next couple of quarters if everyone starts competing aggressively?

Speaker #4: Quite possible. You know, there could be a, you know, situation where everyone, you know, drops their rates, et cetera. There is certainly a possibility there.

Oommen Mammen: Quite possible. There could be a situation where everyone drops their rates, et cetera. Certainly a possibility is there, but we have our benchmark, 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.

Speaker #4: But, you know, we have our benchmark. And even with these rates, we have been able to generate a growth this quarter of almost 6%.

Speaker #4: That is about ₹9,000 crores of growth.

Speaker #3: Yes, sir. Yes, sir. Thanks for that. And, sir, lastly, I think just a data-keeping question—you had shared the mix of gold loans by ticket size.

Abhijit Tibrewal: Yes, sir. Thanks for that. Sir, lastly, I think just 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 Q1 and Q4, and the auctions number, please.

Speaker #3: My line was not good. So if you could just repeat that for Q1 and Q4, and the auctions number, please.

Speaker #4: So, you know, above 3 lakhs, you know, it is—hello? Just give me a second.

Oommen Mammen: Above 3 lakhs, it is

Abhijit Tibrewal: Hello?

Oommen Mammen: Just give me a second.

Speaker #3: Sure, sure.

Abhijit Tibrewal: Sure, sir.

Speaker #4: So, March 25, it is 38% above 3 lakhs. And 1 lakh to 3 lakh is 35%. June, I don't have.

Oommen Mammen: March 2025, it is 38% above INR 3 lakh and INR 1 lakh to INR 3 lakh is 35%. June.

Speaker #3: So the number that you said now for March 26.

Abhijit Tibrewal: The number that you said now for March 2026?

Speaker #4: Sorry, sorry. Just a second. Sorry. I think March, June 26—I think, you know, above 3 lakhs is 16.69%. 1 lakh to 3 lakhs is 22%.

Oommen Mammen: Sorry. Just a second. Sorry. I think June 2026, I think above INR 3 lakh is 69%. INR 1 lakh to INR 3 lakh is 22%. Sorry, earlier number gave was wrong.

Speaker #4: Sorry, the earlier number we gave was wrong.

Speaker #3: So this was June 26, sir. And what is March 26?

Abhijit Tibrewal: This was June 2026, sir. What is March 2026?

Speaker #4: March 26—let me. March 26 is 51%. Above ₹3 lakh is 51%. And ₹1 lakh to ₹3 lakh is 30%.

Oommen Mammen: March 26. March 26 is 51%. Above INR 3 lakhs is 51%, and INR 1 lakh to INR 3 lakhs is 30%.

Speaker #3: Got it, sir. Thank you. And the auctions number?

Abhijit Tibrewal: Got it, sir. Thank you. The auctions number?

George Alexander Muthoot: Negligible.

Speaker #4: Negligible, correct. This quarter? No, it's around 52 lakhs. Negligible.

Oommen Mammen: Right.

George Alexander Muthoot: This quarter.

Oommen Mammen: Sir, it's very less than 50. Negligible.

Speaker #3: Got it, sir. Got it, sir. Thank you. That's also my side, sir. Thank you so much for answering all my questions. And I wish you and the team Truth Finance.

Abhijit Tibrewal: Got it, sir. That is all from my side, sir. Thank you so much for answering all my questions, and I wish you and the team Muthoot Finance the very best.

Speaker #4: Thank you.

Oommen Mammen: Thank you.

Speaker #2: Thank you. That was the last question for today. Aina, I'll hand the conference over to the management for the closing comments. Thank you. I know what you thought.

Operator 2: 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.

Operator: 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.

Speaker #3: Thank you, thank you. We would like to thank all investors for attending the call today on a Saturday evening. We wish you all the best. From our side, we will ensure that the company runs well, the company makes adequate business, the company makes adequate profit, and all stakeholders are kept happy.

George Alexander Muthoot: Thank you. Thank you, well-wishers and investors for attending the call today on a Saturday evening. Wish you all the best, and from our side, we will ensure that the company runs well, the company makes adequate business, the company makes adequate profit, and all stakeholders are kept happy. That is our job, and we will continue to do that, certainly with blessings of everybody, including you, the analysts, et cetera, who generally give us good guidance and good information also. We appreciate that, and goodbye from the management team and good day to all of you.

Speaker #3: So that is our job, and we will continue to do that. Certainly, with the blessings of everybody, including you, the analyst, et cetera, who generally give us good guidance and good information also.

Speaker #3: So we appreciate that. Goodbye from the management team, and good day to all of you.

Operator 2: On behalf of DAM Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Operator: On behalf of DAM Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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Q1 2027 Muthoot Finance Ltd Earnings Call

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