Muthoot Capital Services Ltd
NSE:MUTHOOTCAP
Muthoot Capital Services Ltd
Muthoot Capital Services Ltd. operates as a non-banking finance company, which engages in the provision of fund and non-fund based financial services. The company is headquartered in Kochi, Kerala. The company went IPO on 2015-08-24. The firm is primarily engaged in the business of financing for purchase of automobiles, mainly two wheelers and used four wheelers against hypothecation of the vehicles and granting of personal and business loans. The company is involved in small and mid-size enterprises (SMEs) lending and microfinance. The Company’s portfolio includes retail finance products, such as two-wheeler loans, used car loans along with business loans to corporates and investment products in the form of fixed deposits and subordinated debts. The company also provides loyalty loans, which is a pre-approved loan. The firm offers fund based financial services to retail, corporate and institutional customers through the network of branches of Muthoot FinCorp Limited and two-wheeler dealerships. The company carries out business in approximately twenty states and one union territory in India. The company has approximately 31 branches across India.
Muthoot Capital Services Ltd. operates as a non-banking finance company, which engages in the provision of fund and non-fund based financial services. The company is headquartered in Kochi, Kerala. The company went IPO on 2015-08-24. The firm is primarily engaged in the business of financing for purchase of automobiles, mainly two wheelers and used four wheelers against hypothecation of the vehicles and granting of personal and business loans. The company is involved in small and mid-size enterprises (SMEs) lending and microfinance. The Company’s portfolio includes retail finance products, such as two-wheeler loans, used car loans along with business loans to corporates and investment products in the form of fixed deposits and subordinated debts. The company also provides loyalty loans, which is a pre-approved loan. The firm offers fund based financial services to retail, corporate and institutional customers through the network of branches of Muthoot FinCorp Limited and two-wheeler dealerships. The company carries out business in approximately twenty states and one union territory in India. The company has approximately 31 branches across India.
AUM Growth: AUM reached INR 3,399 crores, up from INR 2,832 crores last year, marking double-digit growth, especially in new product lines.
Profitability Challenges: Q3 profit was aided by a large provision release. Management acknowledged previous quarters' profitability was low due to higher impairment costs.
Asset Quality: GNPA stood at 5.93% and NNPA at 3%. Slippages have been trending down quarter-on-quarter, and management expects continued improvement.
Strategic Shift: The company is reducing low-yield co-lending and focusing on self-sourced and group company business, which is delivering better yields.
Tech Investments: Significant tech upgrades in collections and underwriting are underway, including AI/ML tools to improve recoveries and reduce costs.
Guidance Maintained: Management reaffirmed its aim to reach INR 10,000 crores AUM by 2028 and expects stronger growth in new products (cars, CVs, construction equipment) ahead.
Cost of Funds: Cost of funds has been reduced meaningfully in Q3, supporting margin improvement.
Analyst Pushback: Analysts questioned the realism of past guidance, asset quality pressures, and called for more conservative outlook and improved underwriting.
