Hi, and very good evening to all of you. We have with us the entire management team of Muthoot Finance today to discuss their Q4 results.

I'll hand the call over to Mr. George Alexander Muthoot for opening remarks.

We'll follow that up with question-and-answers. Over to you, sir.

Okay.

Thank you, Sanket, and also welcome to the conference call of Muthoot Finance and subsidiaries for the quarter four and the full year 2025-26. We just concluded our board meeting, and that is the reason the results were uploaded maybe an hour back or 1.5 hours back only.

Sorry for that. Otherwise, commenting on the business, I would start with the gold loan business.

We have the highest ever consolidated gold loan AUM of Muthoot Finance and its subsidiaries at ₹1,65,000 crore, which is a historic growth and has a growth of ₹57,000 crore or 54% last year. The full year, our growth was ₹57,000 ₹57,000 crore, and the AUM consolidated stands at ₹1,65,000 crore.

Looking at the standalone business without the subsidiaries, standalone loans stands at ₹1,64,000 crore, and the highest ever standalone profit after tax of ₹10,134 crore. It is up by 95% year-on-year.

Coming to the consolidated AUM, the consolidated AUM of Muthoot Finance and all its subsidiaries stands at ₹1,81,916 crore as of March, which shows a growth of ₹59,000 crore or 49% last year. The consolidated profit after tax stands at ₹10,607 crore, again up by 98% year-on-year.

Now, a few other highlights I would like to add here. Muthoot Finance declared the highest dividend of 300% or ₹30 per share, and this is the 14th year of consistent dividend declaration since our IPO in 2011.

During the year, we opened 177 new branches by the group. We also have received multiple industry recognitions, as Muthoot Finance is certified as India's most trusted financial services brand for 10th year in a row by TRA Brand Trust Report 2026.

Also, Muthoot Finance has been certified as a Great Place to Work by Great Place to Work Institute for the fifth year in a row. Coming to the subsidiaries, there has been stable performance across the subsidiaries.

In Belstar Microfinance, just as we had guided last year, we have started venturing into the gold loan business, and we opened 81 gold loan branches last year to diversify the loan portfolio. The total branches, including the microfinance, stands at 1,300 1,300.

Collection efficiency in the microfinance increased by 0.69% and now stands at 99.85%, which was 99.16% last year. During the year, we disbursed ₹7,500 crore as against ₹6,000 crore in the previous year.

Muthoot Homefin, the loan AUM stands at ₹3,485 crore versus ₹2,900 in the last year, a growth of 17%. Disbursed loan of ₹999 crore last year.

Interest income increased by 36%, profit after tax stands at ₹45 crore. GNPA stands at 2.63% and NNPA at 1.94%.

Now coming to Muthoot Money, Muthoot Money, which is doing vehicle finance, has been running down its vehicle finance business and has gone into the gold loan business. The AUM stands at ₹9,794 crore versus ₹3,900 crore last year, a growth of 151%.

There has been a share capital infusion of ₹1,000 crore. Being a 100% subsidiary, it is infused by the parent, Muthoot Finance.

Today the capital base stands at ₹2,357 crore. Total income increased to ₹1,294 crore.

Active customer base has shown a consistent growth from 2.74 lakh last year to 4.6 lakh this year. The credit rating has been upgraded to AA+ Stable from AA Stable by CRISIL for long-term borrowings.

The profit after tax stood at ₹338 crore this year versus ₹12 crore last year. These are the main highlights of this year.

We are glad to present a good financials for last year. Definitely thanking the stakeholders, including our customers, our lenders, regulators, and of course our valued shareholders, and also the bankers who have been funding us, and certainly all the analysts also for your guidance.

I think I will stop here and maybe wait for the clarifications and Q&A from the investors.

Hello?

Sir, I have two questions. First is basically what is the expected guidance of top-line revenue and the margins for the next year?

The second is, RPM recently said not to buy gold, how will it impact the Muthoot Finance overall revenue going ahead in the next year? Yeah.

I think generally we don't give a guidance on the margins and the profit. It is when the AUM grows, there will be definitely profit growth also.

Generally we have not been giving the guidance of that in the previous years. Now your second question was about import gold.

I think the Government of India has said that you should reduce the import of gold and they have actually increased the tax also from 6%

to 15%. Because

we don't finance any gold purchase, we don't finance any gold bullion, etc., it actually doesn't affect Muthoot. As we have always been saying, we finance only the household used ornaments of the public, we don't take coins and bullions and bars, etc.

We finance only the household ornaments, which is still intact and there is reportedly about 25,000 to 30,000 tons of gold with us, I think there is good prospects for this business going forward also, in spite of new import of gold being restricted.

Got it, sir. Thanks.

Thanks for answering the question.

Hi. Congrats on a great set of numbers.

I noticed that you've changed the presentation this time. In your last presentation, there was a slide which used to give the average monthly disbursement and the average monthly collection for the quarter.

If you could just please help me with those numbers? My second question is that I'm noticing that the yields have gone up again this quarter.

Are there any NPA recoveries or ARC income which we've booked in this quarter? Okay.

Disbursement, it will be something similar. We have not looked at exact numbers.

The second question, was there any additional income? There was an auction income of about ₹50 crore, ARC I think it is around ₹35 crore, totally ₹85 crore.

There was some increase in the pricing also in the last quarter.

Okay. Could you share the disbursement number for the quarter?

I think it will be almost similar to previous quarters, the trends.

Around ₹18,000 crore or?

I don't have the numbers exactly, I will not be able to share right now.

Okay. Yeah.

Thanks.

Good evening, sir. Thank you for taking my question.

Sir, if you could just help us understand how is the competitive intensity in the gold finance sector trending? Now, the reason for asking this is, in the past, you have explained to us so many times that whenever gold prices go up, the tonnage will come down, something we've seen maybe this quarter as well.

Having said that, we have also had other gold financing NBFCs, obviously much smaller than you, but we are still seeing tonnage growth come through for them. If you could first help us understand how are the competitive dynamics?

Why I ask this again, sir, is that in the past you always said competition will come and go, but not everyone is very serious about gold financing, they do it very opportunistically. This time around, sir, maybe for the first time, we are seeing a bunch of all AAA-rated NBFCs who are themselves deep-pocketed, can raise liabilities at finer rates than us, and at some point in time can also build the distribution muscle, which is very important in gold financing.

If you could just put some of those pieces together for us, sir?

Thank you. You actually asked the question and also gave the answers also.

The competition is there. New and newer people are coming.

Fine. I think I would repeat what I said earlier also.

We are a We are a gold company which is focused on gold loan. The new players who are coming, maybe deep pockets, maybe lesser cost of funds, they are not focused gold loan players.

Focused gold loan players and also gold loan players have a difference which people will realize after some time only, because this is a very operationally challenging, operationally intensive business, and I'm sure people will realize that going forward. Competition will come, after some time, again I'm repeating, some of them will lose interest, some of them who stay focused will definitely be able to do this do better.

They are all opportunistic people. We don't find any people anybody taking away our business also, because in spite of all this, we have been growing reasonably well, if not better than the previous years.

We see continuous growth in this in this sector and we see better things to happen. Now if you look at our slide number 19, slide number 19, you will see, when you compare, we have a second company which has started gold loan business maybe 1.5 years back, Muthoot Money, the row number two.

See, Muthoot Money, the tonnage has increased considerably. Because the tonnage, which was seven, has gone up to 12.

That will be the same for any new player. You consider this also as a new player.

The new player, you compare with Muthoot Money. Muthoot Money, the tonnage has increased from 7 to 11, whereas in Muthoot Finance, we are an established player, we are we are having old legacy accounts with us, and there the tonnage will be definitely will be in proportion to the new loans.

The churn, churn in the loans. The churn in the loan is actually for every four months it is churned.

When every time a four-month churn happens, the new loans are created at a higher LTV, that means they need to give only lesser gold. That is why you see the tonnage coming down.

Say a person who had taken ₹1 lakh would have given me 10 grams last year last year. When he comes this time, instead of 10 grams, he need to give only 6 grams for the same loan.

That is why the tonnage is coming down, that I've been explaining always. When you said about the new companies, in the new company, you just compare Muthoot Money, where the tonnage has also gone up.

The AUM, which was about 3,700, has gone to 9,700. Tonnage has gone up, the the AUM has also gone up, and the number of customers, the number of customers in Muthoot Money were 2,74,000 in the last year, today it is 4,64,000.

Both are growing because it's a new company, young company. For Muthoot Finance, the big the big company, the number of customers not that easy to grow.

There is something else also there, because in Muthoot Finance, with that old account, the smaller accounts up to ₹10,000 and accounts from ₹10,000 to ₹30,000, actually we we have lost about 15 lakh customers there. We have added the same in the higher tickets of ₹50,000, ₹1 lakh, and ₹2 lakh.

Overall, that is the churn which is happening. Smaller loans, people somebody who took a ₹10,000 loan last year, today he doesn't need ₹10,000, the the money value also has gone up, he's coming for a ₹50,000 loan today or a ₹20,000 loan today.

That is why the number of customers are coming down. These are the views, our views about the customers and about the tonnage and also I said about the new players and competition.

Got it, sir. Thank you.

Then the last question, sir, I had is, how is employee attrition trending?

I can't hear you. We can't hear you.

Is it better now?

Yeah. Sir, the last question I had was on employee attrition.

Given that there are so many other NBFCs who are also looking to start gold financing, obviously they'll want to hire people from the best gold financing company in India. How is employee attrition trending, sir?

Thank you for branding Muthoot Finance as the best gold finance company. Okay.

There's always some people going away, but nothing of any alarm, because our numbers are also steady. If somebody goes, we take a new person.

Again, with competition, some people think that just by taking a few managers or staff from Muthoot, they can start a gold loan business and maybe start branches. I'm not reserving my comments now.

Let us see what will happen, what they will be looking after two years and three years. We have not lost any staff, sir.

We still have about 30,000 30,000 staff, we still have that.

Got it, sir. Earlier, Oommen sir had mentioned that the higher interest income that we saw was also because of some higher pricing or pricing changes that we have done.

Last quarter, we increased our rates by about 0.5% to 1% over certain types of loans, so that is why we see the yield has gone up.

Got it, sir. This is useful.

Thank you so much for answering all my questions, and sir, I wish you and your team the very best.

Thank you.

Hi, team. Congrats on the quarter.

Just sort of going back to the earlier questions. This yield movement from 20.34 to 20.76, does this include one-off interest recovery numbers or is this just core?

There could be the regular churn which happens. Previous occasions what happened is your NPA has come down.

This time the NPAs have gone up. The one-off cases will be one is the auction income, ₹50 crore, and what is the other thing?

The ARC that is ₹35 crore. The yield increase also has happened

during the quarter.

Okay. Sir, Oommen sir, the last quarter we also had a ₹500 crore interest write-back from GNPA recoveries.

That would be part of this 20.34% yield number of last quarter, is it?

Last quarter, yes. This quarter,

that is not part of that happened last quarter.

Correct. If I adjust for that, our yield improvement is very sharp.

It could have improved more than 100 bps.

Yeah, 0.5% to 1%. We don't want to get into the specifics of the yield increase, last two quarters, there have been a lot of increase in the gold price, especially in last fourth quarter.

We have charged some extra for those disbursements.

To

that extent, we got some extra benefits.

Understood. Sir, now that we are anyway earning a pretty solid yield of 20.8%, is there a thought that we can maybe cut yields a bit and increase our customer count?

Because our customer count has also gone down a bit.

Piran, this is something which we have always discussed. We have the luxury to reduce the rate.

That's why we always used to give a guidance of a medium-term RoA of around 3.5%. If the yield reduction adds a lot of customer base, certainly we would like to do, which we are already doing.

Last several years, we have been offering schemes at lower rate.

We have different schemes. We have yield for 22%, 23%, yield for 18%, 15%, 14%, 12%.

We have different. At some point of time, when we feel that we need to step up the lower-yield portfolio, we will do that.

As of date, we don't see any need for that now.

Understood. Understood.

Sir, just one last question. It's just a technical thing on slide 28 where you talk about the margin of safety on loans from the lender's perspective.

The market price of the gold

ornament Your voice is cut off.

Yeah. In that chart where you show the market price of gold ornaments, which is ₹2,634 billion for March '26, is it as of 31st March or do you take a monthly average number?

No, we have put the price also in the table above, no, 13,441.

As of that date also.

As of 31st March.

That date itself. That date.

As of the date, not monthly average. Yeah.

That's it from my end. Thanks, and wish you all the best.

Thank you.

Yeah. Hi.

Good evening. Congratulations on good numbers.

Again, just looking at the customer metrics, while the acquisition in this quarter is better, reactivation of customer is better, we've still kind of degrown at a customer base level by 2%, which means we're also seeing slightly accelerated attrition. Is there any observation around it that the customers already with us are also moving to competition in the quest for better rates or the high-value customers are moving out, which is impacting not just the customer number, as well as it is also impacting the tonnage growth as well?

Is there any observation like that of the management?

I think I just five minutes back I explained. Even somebody did not ask that specifically, but we explained that we have the customers up to 0 to ₹10,000 customers, we have lost about five 5 lakh customers, and between ₹10,000 to ₹30,000, maybe another eight 8 lakh customers have gone out.

Then if the customer total count is remaining same, it only means that the customers in the other segments, maybe ₹50,000, ₹1 lakh, ₹2 lakh, have grown. See, very small customers or ultra-small customers, they may tend to leave or maybe go away also.

That doesn't matter much to us, because a customer of ₹10,000 or ₹30,000 leaving us, maybe he takes it off. Either he comes again for a bigger loan or he does not come again.

I don't know whether somebody is taking away the ₹30,000 customer or ₹10,000 customer. I don't think anybody would like to take such small customers.

The point I was saying was very ultra-small customers, ultra-small loan customers would have left, but the medium and the better customers are still growing with Muthoot.

To give an example, suppose if less than 10 less than ₹50,000 customers, say 10 lakhs customers have left, you have added another 10 lakhs customers in the higher bucket. Net-net, if you see, because the smaller ticket size customers would have closed their loan, which are large in number, we will not be able to match the exact same order.

This happens for a large portfolio company, and new company will not face, that's why, in the previous question, we explained

Slide number 19.

We explained how Muthoot Money has grown. We just want to bring a comparison to the new players.

If it is a matured company, large portfolio, that churn will happen in the portfolio, which will be there, a shift in customer basis from low ticket size customers and higher ticket size customers. This plays an important role, and in spite of this, we have grown a little bit in terms of outstanding number of cases.

This is a natural phenomenon which will happen in any portfolio which has become mature.

Just coming back to the yield thing, because the movement is so sharp, and last quarter you had a major interest recovery as well, which you don't have this quarter. You've raised the price.

This NPA increase which has happened in this quarter, which is Stage 2 has increased, Stage 3 is also significantly increased, that would have given you some more interest income recognition maybe in this quarter. Why did we see an increase in Stage 2 and Stage 3 so much in this quarter?

Is there any peculiarity around it in terms of customer profile, occupation, or any geography?

No. The Stage 3 increase has happened primarily because RBI has advised us to do a borrower-wise classification.

Earlier we were doing this classification at the loan level. This time we have done at the borrower level.

To that extent, there is a increase in the NPA. That's why there is a jump in the NPA.

If you look at percentage-wise, it is much lower than what was there in the March '25. March '26, it is 2.35 34.

I think last year March, it was 3.35. The NPA absolute amount has increased because of the borrower-wise classification.

When you do a borrower-wise classification, a lot of this Stage 1 and Stage 2 customers also will be classified as an NPA, where probably the interest servicing is done, the interest reversals will be much lower. If you look at the LTV including on this NPA bucket, including the interest accrued, it is only around 58%.

On

Stage 3.

On Stage 3.

On Stage 3, where we show as an NPA, the interest plus principal is only 57%. We are in the money.

Technically, we have to

or

maybe regulatory-wise, we have to show it as an NPA, but it is 100% 100% recoverable with interest. Just the customer has not come forward to maybe close the loan or renew the loan, etc.

That is why it is seen as an NPA.

If I were to look at your yields on a sustainable basis, I just need to subtract ₹50 crore of auction and the ₹35 crore of ARC as being one-offs. Otherwise, what you reported, 20.2% yield, should be largely sustainable unless you make some pricing changes, right?

Yeah.

Pricing changes can happen, because it's a short-term loan, two months to four months.

Yeah. Yeah.

Yeah.

This pricing increase in between happened because when there was a sudden price increase, we thought we'll take some benefit out of the increase in the gold price.

Increase in demand also.

Got it. Thank you so much, and best of luck.

Hello. Hi.

Sir, you touched upon the difference between operational challenges that a newer player would face. If you can share just a brief color around in terms of examples.

I understand that there is handling gold and everything, but apart from that, historically from your experience, what are the major challenges?

Actually, why we want to go into all these details, sir, anyway, all this nuts and bolts of it? That I told you, the new players will understand after one year also.

Let us wait for them. Why we should put words into their mouth?

Let them understand it at that time.

Okay. Understood.

If you can share some color around the growth, as you said that you give guidance around AUM, if you can share growth guidance on that.

Always in the first quarter, we have always been giving a guidance of 15% only. As usual, last 10 years, we have been giving 15% guidance in the first quarter.

In quarter two or quarter three, we will see how it is panning out and probably revise it.

Okay. Thank you.

Yeah. Thank you, sir.

Thanks for taking my question. Just wanted to know one thing.

This Stage 1, Stage 2, Stage 3 increase that you said that it is because of borrower-wise classification, is that the only reason? Apart from that, the asset quality is more or less stable?

That's why we said, on Stage 3 assets, including the interest dues, it is only 60%, maybe 58%.

That's recoverable. Including principal and interest, it's only 58% of the present market value of the gold.

It is not because of any impairment in the loan, etc. It is only because of the regulatory guidance that it should be shown as an NPA.

I'm saying, excluding that factor, otherwise the asset quality performance is stable?

100%, 100%. We have our audit team also.

Asset quality has always been stable. Wherever there is anything else, we just write off at that time.

Secondly, sir, how do you see AUM growth as a standalone entity and consol AUM? Any guidance that you would like to put for next fiscal?

Broad range, how do you anticipate how AUM to grow next fiscal?

For the standalone Muthoot Finance, we have been always been giving a guidance of 15%. Last 10 years, the first quarter we have always been giving a guidance of 15%.

We'll continue to do that. We will relook at it in Q2 or Q3.

Q1 or Q2, after Q1 or after Q2, we will relook at the same.

Sir. Thanks.

Hi. Thanks for taking my question.

A couple of questions, actually. Any strategy or any guidance on branch expansion year and after?

Yeah. Okay.

Probably last year we opened 170 branches also. This year maybe 200, 300 branches, that's it.

Okay. Maybe 200, 300 versus 170.

This will be at the Muthoot Finance level, right? Maybe if you could give some guidance on consolidated gold branches across all the companies.

I think Belstar, we were thinking of opening another 200 branches also, because it's only about 100 branches, Belstar, which is a microfinance company. Muthoot Money, I don't think we are aggressively looking at maybe because the branches are quite young.

We are waiting for it to mature a little more before opening many branches there.

Belstar, these 200 will be gold branches?

Gold branches. Sorry.

Sorry, gold branches. Gold branches.

Okay. Got it.

Essentially around roughly 200 in Muthoot Finance and roughly 200 in Belstar, I think that's the way one thinks about it.

Approximately like that. Yeah.

Got it. The other thing is increase in Stage 2 loans would also be similar reasons in terms of the borrower classification or any other reason?

Yes, Nishchint. Primarily it was because of borrower classification.

Again, it is not much of a concern, because it's a 12-month bullet repayment loan. As and when the disbursements keeps increasing, naturally after 12 months there will be a corresponding jump in the stages.

All the increases in gold loans, right? Stage 2 and Stage 3 quarter-on-quarter increase that we see is in gold loans, right?

Not the non-gold.

Yes.

Anything specific that's growing in non-gold loans? I think which is also up around ₹3,000 odd crore in a year.

Anything specific that you are doing over there? These are unsecured loans or what are these loans?

These are unsecured personal loans, salaried personal loan and unsecured personal loans, which is doing actually quite well. We have about ₹4,000 crore of portfolio there.

Mostly cross-sell.

Cross-sell. It's mainly a cross-sell to our existing gold loan base.

We have a gold loan base. We give personal loans to them.

Cross-sell.

Got it. Just finally on coming back to the yield part, you always kind of maintain that 18%, 18.5% is probably a more normalized yield, and obviously we have done almost 150 or 200 basis points higher this quarter.

Would you kind of incrementally say that the 20-plus is a new normal, or would you probably say that next year you would settle somewhere between 18.5 to 20? I think

our Treasury Finance says that the borrowing cost is looking north of north, probably we expect borrowing costs also may go up in the coming, probably we may not be able to reduce anymore. We may be able to maintain at this rate.

On a more normalized level, yeah. Sure.

Great. Thank you very much.

Hello. Hi, sir.

Congrats on a good set of numbers and on the strong yields. I just wanted to get a clarification on the yields based on all that you've been commenting till now.

For the past three quarters, we have had a few one-offs in the yield, some ₹300 to ₹600 crore per quarter based on NPA recoveries and ARC sales. You used to say, the sustainable level of yield was something around 18.5%, while the reported yields were 20%, 20.3%.

Would you upgrade that 18.5% now for the next year or for a sustainable basis? Is that 18.5% now closer to 20.5%?

See, it's not like a long-term loan where we are giving a loan for 10 years or 5 years or 20 years. See, this is a very short term.

Tomorrow if we want to increase it, we can increase it. We may also reduce it.

What is the impact? Because of such things, we have a comfortable margin.

This quarter, I think we have generated a RoA of around 7.5%. It doesn't matter much in terms of the ultimate impact on the return on asset.

We don't want to give a view that the same rates will continue, because, again, to be very frank, some of the analysts have just now asked on the competition, customer base acquisition, etc. We as an institution might take calls in different points of time, we don't want to give a commitment that the same yields will be maintained.

Understood. At least to clarify on that, the pricing increase that you took at some point in time in the past few months, which has resulted in this yield, as we speak, as of mid-May, that pricing has not reverted back to the previous lower pricing.

Am I right in this understanding?

No, see, we think from our point, we don't want to give out our strategy in terms of approach, because, as everyone say, it is a highly competitive market, what we roll out, probably we can tell you after we execute it.

We generally have to play by the ear also. That means ear means E-A-R.

That thing coming, it's all very short-term loan. It's always can be dynamic.

We can reduce, we can increase, etc., as required so that we maintain a good growth as well as maintain a good profit.

I think that decision you should leave it to us. Every quarter you look at the numbers, we can explain what has happened and take a view based on the performance in the last several quarters.

Understood. Got it, sir.

Just another clarification, this is on the competitive landscape, which has again been discussed, and you were very clear in your answer and it is very clear that you are the market leader and you have done this for multiple decades, so that experience definitely helps over cycles. In the immediate near term, are there any specific efforts to stop this?

I see 3% reduction in loan count, 2% reduction in active customer. Are there any specific efforts to stop this, or is the approach more long term and that competitive intensity would just course-correct over the long term?

I'll clarify. See, what we are trying to explain is, see, being a large-portfolio company, been in existence for several decades, we have custom base across various ticket size.

Now what happens is the smaller-ticket size customers vanish over a period of time. At the same time, we are creating higher ticket size customers also.

Probably because the smaller-ticket size customers were initially larger in number, there the liquidation brings down the customer number in has a larger impact, whereas the higher-ticket size customer, number may not be correspondingly the same. Which we call it as a churn in the customer base.

That number has not much of a relevance. Ultimately, it depends on how much a customer wants, etc.

This phenomenon will happen for all companies which will stabilize their business operations after some time. That's why we said, look at Muthoot Money's case, the tonnage is increasing.

Slide number 19.

Slide number 19. Muthoot Money, the AUM is almost doubled.

There you are seeing an increase in the tonnage, there you are seeing increase in the loan account numbers, there you are seeing increase in the customer base. The same percentage increase you will not see happening in Muthoot Finance.

It is the same group,

the same management, two different phenomena, which is what we are trying to educate the investor community how this business functions.

Understood. That's clear.

Got it. Thank you.

Thanks for that.

Hi, sir. Thank you for giving me the opportunity.

My question was firstly on what is the interest accrual number during the quarter? Just give us.

Any other questions?

The other question is that how many Muthoot Money branches overlap with Muthoot Finance in terms of, let's say, having it in 1 km or 2 km radius? The other follow-up there or addition there is that now since there is no cap in terms of Muthoot being allowed to or, let's say, needing to take approval from RBI in terms of branch expansion, then why are we thinking to do gold business in the subsidiaries that we have?

What is the thought process there? Because now we can scale up the Muthoot Finance franchise itself, right?

Just your thoughts there.

That's an advice on a policy decision. I think we will have to discuss it internally only.

You have to give us some

No. I just wanted to understand what's the thought process there actually.

I think that's a board decision and that company's individual decisions. Let us leave it to them.

Now your question about the

Interest accrued, it's ₹963 crore.

₹963 crore.

The branch overlap within 1 km radius for both the entities, Muthoot Finance and Muthoot Money, broader if you could give some color

there? We have branches where we have Muthoot Finance, we have gold loan NBFC number two, gold loan number three in the same building.

So

Same building, you will have all the competitors. Whenever Muthoot Finance opens a branch, all the competitors open branch side-by-side, if possible next door or if possible 20 feet, 30 feet, 50 feet.

There is nothing like a 1 km, 2 km, etc. Where Muthoot Money saw an opportunity, they opened the branch, irrespective of whether Muthoot Finance is there or competitor number one, competitor number two, competitor number 10 is there.

There are so many competitors today.

Got it, sir. Sir, just one last question was on the newer framework by RBI in terms of the gold financing players.

From 1st April, we are supposed to maintain or monitor the LTVs more closely. What are the challenges are we facing at ground level or what are the deviations that we have made in terms of our processes, policies, or operations stand point at branch level?

I think the policy has been quite good. The LTV maintaining has been from the last 10 years or 15 years back only the LTV came.

From that day till today, we are always maintaining the LTV at the RBI-regulated rates only. Now they have given an option of giving 85%, 80%, etc., so that gives us little more room for giving different types of LTVs and loan products to the customers.

That's the only advantage. Now the processes for that, the software for that is not easy.

We are also in the process of doing it. We have rolled out some products also, going forward we can, what should I say, tailor-make more products for the customers.

Just like Muthoot, everybody else is also coming out with newer loan schemes, etc., in line with the new regulations. Your first question, we always, whether it is now or before this new regulation or previously, we always been maintaining the LTV at the regulated rates only.

Got it. Can I just squeeze in one more question here if you don't mind?

Yeah. Yeah.

Sir,

the last question was, if we have taken an interest rate increase during the quarter, and since we're also following the final framework by RBI, our disbursement LTVs would have declined on a sequential basis, right? Because if we have taken an interest rate increase, then the actual disbursement LTVs typically would have come down now.

Is that a fair understanding? Incrementally, if we follow this, our LTV will continue to be sticky with rates tweaking happening at your level.

See, now the new regulations allows you to follow two structures. If you are following a bullet repayment, you have to reduce the interest accrued.

There also various options are available. If you are following a EMI structure, you can give up to 85%.

Now I'm talking about ₹2,50,000 per customer. We have made some changes, but at the end of the day, it is in our interest to protect our interest, right?

We'll take care of that. We'll discuss after first quarter on that, the strategies based on the

We'll come to terms with the new regulations.

Got it. I'll maybe take it offline with you, sir, if you don't mind.

Yeah.

Thank you, sir.

Yeah. Hello.

Thank you. Am I audible?

Yeah.

Yes, you are.

In continuation to LTV, on an average what's our gold loan LTV today and what LTV range we consider comfortable from a risk management perspective?

Today our gold loan LTV is 57%. The average gold loan in our books is 57%.

What range do we consider comfortable?

Range comfortable higher end or lower end?

On a higher end.

No, RBI regulations allow up to 85%, no?

From a risk management

We don't see much risk in giving at 85% currently.

Yeah.

Historically how much high we have given on an average?

For the last 10 years, it is 75%, no? Right now RBI allows up to 85%.

Okay. Got it.

Yeah. Thank you.

Hello.

Yes.

Hi, sir. Just a small question.

If we see loan AUM per loan account with reference to the slide number 19, the number has gone up for Muthoot Finance as well as for Muthoot Money by around 49%, 48%, 49% year-on-year. Is that rise is due to that borrower appetite just because of the gold loan price has gone up?

What is the basic reason for such a sharp rise in the loan AUM per loan account?

If you look at the similar statistics for any NBFC, it'll be the same, because the loans are given for very short period. In every three months to four months, the loan gets churned, and new loans are priced at the new LTV.

Somebody who had taken ₹1 lakh last year, when he comes after one year for a ₹1 lakh, instead of 10 grams, he need to give only 5 grams, because the price has gone up. Definitely the grammage will be lesser and the loan amount will be higher.

People tend to take more loans also.

No, that's point taken that since the gold price is rising, obviously he can avail higher amount of loan for the same gold quantity. Why should he take that much of loan?

Is there a need basically?

That's it, you answered it. See, what happens is Muthoot Money is a new company.

What happens is you are adding more and more new customers. Number of customers has increased from 2,74,000 to 4,68,000.

Now a lot of these new customers were looking at a higher ticket size customers. No?

Muthoot Finance has, if you look at more than ₹3 lakh ticket size customers, we have 30, 32% of the total book. As and when the company increases its footprint as well as attracts more and more customers, people from higher ticket size also might come in, which elevates the average ticket size number.

Ultimately, why should somebody pledge gold jewelry with a 25% margin? He has a requirement.

Finally this business is driven by his working capital funding requirement. If he has a need, he will take a high ticket size loan.

Somebody who has a lower need, he will take a lower loan.

Why is he taking a loan? It is up to him.

Because anyway he has to repay the loan. If he takes ₹1 lakh, he has to repay ₹1 lakh plus interest.

If he has taken only ₹50,000, take. There's a need for him, that is why he is borrowing.

Otherwise, why should he borrow?

See, basically this business, you're dealing with large number of customers with varied needs from different funding requirements. That's why you see all these numbers.

It's very difficult for us us also to explain it at a granular level. His requirement is large, which elevates the ticket size.

Got it. Setting aside Muthoot Money, if you look at Muthoot Finance also, the similar thing is happening.

There also the growth is around 48% 48% year-on-year.

The average ticket size has been growing up over the last 10 years. Maybe five years back, our ticket size was ₹15,000.

Then it became ₹25,000, then it became ₹30,000. Today I think it is ₹1 lakh

₹1.5 lakhs. It has increased to ₹1.5 lakhs from ₹1 lakh.

Basically you would also be trying to assess that what they're doing with the loan amount, you would have also kind of looked into it.

We ask them, some people will say that they have for business requirement, etc. The new guidelines kicking in, there is some assessment about his income, etc.

Beyond that, customer may not cooperate. Customer may say that he is using it for business purposes, etc.

Got it.

At the end of the day, because he has to pledge jewelry, only if he has a need he will pledge, otherwise why should he part with a margin of 25% and pledge his jewelry?

Margin of 50%

also. If you include the making charges, the borrower is parting with almost 40%, 50% of the value of the jewelry.

Now

considering the inflation rise or considering the credit growth in that entire lending ecosystem, if this kind of a growth is there per customer or per loan account, that looks very surprising.

See, people are not using this money for making an investment, these are all called working capital requirement. See, money lending activity is short term.

Somebody has a short-term requirement, he is taking that funding. Either you can borrow from your friend or your relatives, or you can pledge with the jewelry, after two weeks he will repay it, which is why we are talking about the churn in the portfolio.

Got it. He might be rotating also this

See, today somebody coming and taking a loan, two weeks later he will close it, then he might come after maybe one month.

True. Sure, sir.

Got it.

Thank you. Thank you.

Okay. Here from the management side, very happy that we have had a lot of queries and questions, and probably we hope that we have answered your questions.

We are always grateful to the investor community as well as to the analysts who actually get clarifications from us. It keeps us also maybe on our toes.

From the management side, as a company, we would like to grow the book, grow the company, do better results, which will help customers to get more money for their needs, for the investors to get more returns, and maybe for the company and the staff also to do well. With all your cooperation, with all your support, we assure you that going forward also, Muthoot Finance will put in all efforts at the top management up to the lowest level to see that the interests of all our stakeholders are well taken care of.

With that, thanking all of you and also the people who participated from here for a what should I say, a very enriching conversation. Thank you, and goodbye.