Muthoot Capital tumbles as Q1 PAT slips into red

The loss marks a stark reversal from the Rs 5.92 crore profit reported in the March 2025 quarter and an even sharper fall from Rs 11.41 crore a year ago.

Net interest income (NII) held firm, inching up 1% sequentially to Rs 70.21 crore in Q1 FY26. On an annual basis, NII rose a healthy 25%, suggesting the company's core lending operations remain stable, even as profitability took a hit. Interest income rose 6% QoQ and 45.32% YoY to Rs 145.32 crore.

Pre-tax profit flipped into a loss of Rs 6.17 crore in Q1 FY26, compared to a profit of Rs 6.98 crore in Q4 FY25 and Rs 14.51 crore in Q1 FY25. Rising asset stress continued to weigh on performance.

Asset quality showed signs of pressure. Gross non-performing assets (GNPA) rose to 5.76% from 4.88% in the previous quarter, though they improved significantly from 9.84% in the same period last year. Net NPA edged up to 2.70%, versus 2.30% in March and 3.41% a year ago.

Disbursements were down 6% QoQ to Rs 618.58 crore but surged 24% year-on-year, pointing to an improving demand environment. However, operating expenses rose 5% sequentially to Rs 51.90 crore and jumped 40% over the year. Provisions and loan losses soared 61% QoQ and a massive 449% YoY to Rs 26.68 crore.

The Capital Adequacy Ratio (CRAR) stood at 22.07%, compared to 22.37% in Q4 FY25 and 28.80% in Q1 FY25.

Meanwhile, assets under management (AUM) saw strong growth, climbing 6% sequentially and a robust 49% year-on-year to Rs 3,238.74 crore.

Muthoot Capital Services, promoted by the Muthoot Pappachan Group, is a Non-Banking Finance Company (NBFC) registered with the Reserve Bank of India.

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