Ladies and gentlemen, good day and welcome to the Muthoot Finance Q3 FY 2025 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 touch-tone phone. Please note that this conference is being recorded. I'll hand the conference over to Mr. Sanket Chheda from DAM Capital. Thank you, and over to you, sir.
Yeah, hi, all. Thank you and very warm good evening. We have with us the entire senior management team of Muthoot Finance to discuss their Q3 results. From the management team, we have Mr. George Alexander Muthoot, who is the Managing Director, Mr. Alexander George, who is the Whole-time Director, George M. Alexander, Whole-time Director, George M. George, Whole-time Director, George M. Jacob, Whole-time Director, and Mr. Eapen Alexander, who is the Executive Director, Mr. K. R. Bijimon, who is the Executive Director, and Mr. Oommen Mammen, who is the CFO. Without further ado, I will hand the call over to the MD sir, for their opening remarks, post which we will follow up with the question and answers. So over to you, sir.
Thank you and good evening to all. We are pleased to place before you the financial results of Muthoot Finance. We had a consolidated loan assets under management, which grew by 34% year-on-year to INR 111,308 crores as of 9th March, as against the INR 82,773 crores last year. During this quarter, the consolidated loan assets under management increased by INR 7,159 crores, an increase of 7% quarter-on-quarter. The consolidated profit after tax for the nine months stood at INR 3,908 crores, as against INR 3,285 crores last year, an increase of 19% year-on-year. The consolidated profit after tax for Q3 of this financial year increased by 21% year-on-year to INR 1,392 crores, as against INR 1,145 crores in Q3 of last year. We are pleased to report another strong quarter, building on our robust performance trajectory.
The Q3 financial year 2025, our standalone assets under management witnessed a significant growth of INR 26,305 crores, driven by a robust 37% year-on-year growth on our core gold loan portfolio. During nine months, the gold loans increased by INR 21,660 crores, registering a growth of 29%. This was in tandem with the accelerated demand for gold loans, especially during the festive season. Our standalone profit after tax for the nine months grew by 23% year-on-year, stands at INR 3,693 crores. The surge in gold loan advances reflects not only the trust our customers place in us, but also the resilience of India's economic momentum. Among our subsidiaries, we have witnessed growth in the housing finance arm, disbursing INR 880 crores in the nine months, up from INR 493 crores last year.
We have tempered disbursements in response to a challenge faced in the microfinance sector, and all our focus continues to be on strengthening collections and enhancing quality of the loan book. We are closely monitoring the industry situation, and we see this as a transitory issue and expect it to get resolved in the next couple of quarters. The expansion of our branch network and the increasing adoption of digital platforms have further strengthened customer engagement, with a significant portion of transactions now being facilitated through digital channels. I think I will leave it there. All the other details, etc., are there with you in the presentations, and I will now wait for the queries and questions from the team there.
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. We take the first question from the line of Rajiv Mehta from YES SECURITIES. Please go ahead.
Yeah, hi. Hi, sir. Good evening. Congrats on very strong numbers. Sir, my first question is on, I mean, the employee expenses were higher Q1, Q2, and Q3 by a significant extent, but when I look at the employee base, it's flat. There is 0% growth in employee base. So can you please elaborate on how this growth in employee cost has come about? Maybe you can slightly elaborate about the variables, the incentives which were there, or maybe any new plans or new schemes of variables or incentives which were introduced for growth?
Yeah, I think there are two things. One, when the business growth, we will have a step-up for the business growth. Second, during the last quarter, which is the festive quarter, all the annual bonus, the hourly bonus, all are paid in that period, and that would have been the reason for the employee cost to go up. But again, it is in line with the usual trend, I believe.
And can you also comment on the growth outlook now? Because you have already achieved your full-year guidance. We are already up 29% in the year. But what is the incremental growth outlook from a pure volume perspective? Of course, value-wise, gold is going up, but from a volume perspective and from a competition perspective, do you remain very confident about delivering very similar performance in the coming quarters also?
I wouldn't want to say exactly that, but certainly, there will be growth in this quarter also. But I wouldn't want to commit a number to it. But anyway, we are glad that we were able to grow this much in the nine months. In the nine months, we are glad to see our growth there. The next quarter also, we should see some growth, but I don't want to give a number to it.
And just one last thing I want to clarify. Whether from January, have we made any changes in terms of any practices on the ground in any of the aspects? Because there was a regulatory observation for all the gold loan players, and three months were given for feedback, and I'm sure there would have been a to-and-fro discussion with the regulator. But post that, were there any conclusive feedback from the regulator which we had to implement on the ground in January and February?
You are right. There was some communication from the regulator. It is mostly hygiene checks, which all banks and finance companies need to do, and we have given our comments to them. And to answer your question, we did not have to do any changes in the processes which we are doing. It is mostly a process-oriented, and it is in line with what we are doing. And there were no changes required in that.
So no impact on growth as such from those changes.
Right. No.
Got it. Thank you, sir, and best of luck.
Thank you, sir. We take the next question from the line of Shreya Shivani from CLSA. Please go ahead.
Yeah, thank you for the opportunity, and congratulations on a good set of numbers. Sir, I have two questions. First is on the borrowing profile. If you can give us a little bit of idea on the cost of fund rate movement, the trend in the cost of fund that we can expect in Q4 and the year to come by. I believe a majority of our bank loans are MCLR-linked. Is there some more color you can give in terms of how much is six-month MCLR or one-year linked? And is any of our borrowing linked to repo rate? Sir, my second question is on the partnership. Your PPT talks about partnership with GPay and PhonePe. Can you help us understand how the business dynamics and the sharing of the economics of that partnership will take place? And how much I mean, yeah, the economics.
Can you talk about the economics of the thing? Thank you.
In terms of borrowings, we have the secured debentures. We have the bank borrowings, which constitute 56%. Secured borrowings, NCDs, constitute about 26%. Now we have ventured into the ECB borrowings for the current year again. So that constitutes about 13%. I think these are the three major avenues where NBFCs can do borrowing. In terms of borrowing cost, I think it's roughly around 9% will be the borrowing cost. Most of the limits are linked to MCLR. Because we have a larger proportion of term loans, most of these term loans are going to reset at the end annually. Very few loan limits are less than under the working capital limit. Majority is in the term loans. That reset is going to happen annually. Loans linked to repo rate, it's very, very negligible.
Got it. Sir, what would be the landing cost on your ECBs? And this 9% you mentioned, is this incremental cost of borrowing?
Yeah, roughly around 9% will be the incremental cost.
The next question you asked was about the Google Pay and PhonePe. Yes, we have an arrangement with them. Their arrangement is for lead generation, which will help us in gold loans, personal loans, LAP, etc. So they are generating leads for us, and we just started it. So it's going on.
Okay, sir. So it will be only they'll be like distributors for you. You'll pay just fees, whatever things, for generating leads for you, right? That's how they.
They're generating leads for us. Yeah.
Okay. Okay. Yeah, thank you so much. Those were my questions. And all the best.
Thank you. We take the next question from the line of Vaibhav Badjatya from Honesty and Integrity Investment. Please go ahead.
Yeah. Hi, sir. Thanks for providing me the opportunity. So, sir, in one of the earlier con calls, you specified for the microfinance business, you have customers you require to come to your branches to pay installment versus other companies having field agents who go and collect. So in terms of why do you think that this approach is better, and where does it reflect in terms of either reducing regulatory risk or better credit cost? How this approach is better?
See, a good part of our business in the [audio distortion] but from the...
SHG.
SHG model. So they have a connect to the customers even before they take the loan. So that is one of the main advantages or differentiator with us. The second is, again, the loans, the customers start to come to the branch to pay the money. And that is our model. I think it is definitely having helped us. I wouldn't want to compare it to the other models, but definitely it has helped us, and probably it is standing us in good stead now.
So it also gives a feel like a bank-like environment when they are able to come to the branch and do the transactions with them.
That's what we're doing.
Okay. Okay. Got it. And then lastly, on many con calls, you have always guided for 4%-5% long-term ROA. Currently, we are doing much better than that, for sure. But for a long-term basis, you have always guided for mostly 4%. But even if you achieve 4%-5% on a long-term basis, and your leverage is always less than three, so that implies that your ROE will always be around 12%-13% if we get to our guidance that you always give. So how do you think about the leverage? Because we keep generating a lot of profit, keep accumulating this, and leverage keeps on reducing, which depresses. So I just want to understand what are your thoughts on that?
The last one year, l ast December, it was 2.2.
Sorry to interrupt, sir. We are losing your audio.
So leverage has increased in the last one year. Last year, it was 2.24. Now it is 2.75 times leverage. So it improves along with the borrowing. Though we are generating capital, I think sooner or later, we should be seeing a better leverage and better utilization of the capital.
But any thoughts on increasing, I mean, trying to give more dividends to the shareholders and trying to improve ROE through that?
We had a board meeting today also. Such discussions were not there. But I think the businesses are doing well. So we feel that maybe no decisions have been taken anyway. But keeping more money in the company definitely helps, I suppose.
Okay. That's it from my side. Thank you.
Thank you. We take the next question from the line of Mona Khetan from Dolat Capital. Please go ahead.
Yeah, hi, sir. Good evening, and congratulations on Q2. So firstly, if I have to look at NPA in the standalone book, how much would be the non-gold, how much would be coming from non-gold segments versus the gold? If you could help me with that. It was about INR 190 crore last quarter, the non-gold NPA.
So what was your question? I didn't understand the question here. The NPA, the stage 3 for this year is 4.22%. This quarter was 4.22% versus 4.3% just in the middle quarter. So what is the question? I didn't understand the question.
So this includes gold, PL, and some SME book as well, right? So I'm just trying to understand how much is from the non-gold segments versus the gold. I think it was INR 190 crores, as you highlighted last quarter. Where does it stand for this quarter?
Around INR 300 crores.
Okay. So, we are seeing a significant rise in this segment. It mainly comes from PL. So, could we expect this to be the peak? Or what is the thought process here in the PL NPA or the non-gold NPA in the standalone book?
Non-gold, I think this will be the peak, of course. As when you grow the book, naturally, the absolute amount could increase. But with the current non-gold portfolio, I think this should be the peak.
Okay. And how about the ARC sale? What is the outstanding? And when could we expect, if at all, any benefit to come in the other income?
It has already started coming in terms of booking the income. We have already received the principal amount of the security receipts. We have already started booking income based on the collections coming from the residual portfolio.
Probably in the next quarter, we should see it fully coming back.
The outstanding is nil. All the loans have been sold by the ARC?
No. So the loans, some more portions are there. What I've said is the security receipts, the value has come down nil. So we are able to book income from the collections.
Hereafter the collections which comes will be booked as income in Muthoot Finance.
Got it. Got it. So something substantial could come in the interim quarters. And there was some small component this quarter as well.
Yeah. Yeah. You are right. You are right.
Okay. And just finally, on the branches, what kind of approval do we have for this year for additional branches?
We had approvals. I think they are again given papers for approval. I think it should come this quarter also.
So right now, we don't have any RBI approval for FY 2025 branches. Is that a fair understanding?
So this year, we focused on expansion of branch network in our wholly-owned subsidiary Muthoot Money. So we have added almost close to about 800 branches during the year. We have transformed Muthoot Money from a pure vehicle finance company into a gold loan company. So because we felt that vehicle finance business is too competitive and the margins are lower, so we transformed that company into a gold loan company. So we focused on building the network in that company. So currently, it has close to 1,000 branches.
950.
But the approval for this year from Muthoot Finance, the standalone business, it's not yet there from RBI.
Last approval, we completed opening of the last approval last quarter. This quarter, there were no pending approvals.
Got it. Thank you so much, and all the best.
Thank you. We take the next question from the line of Shweta from Elara. Please go ahead.
Thank you, sir, for the opportunity and congratulations on a good quarter. So I have two questions. One, for the fresh loans to new customers, the quantum has actually remained steady quarter on quarter and rather come down from the beginning of the fiscal year. Now I understand that the financial growth largely would have been attributable to the gold price, the underlying gold price hike. So how do you see actually the organic growth, either from the customer addition or productivity gains through branch network expansion will come through in the next or forthcoming quarter? That's question number one. Question number two, so banks and Ministry have been highlighting about rising GNPAs in the gold lending segment. Now I completely understand it's a highly recoverable asset, and you have strategy in place.
But given the fact that you also acquire customers and sort of take time for auctioning processes, how do you see the gold loan NPA picture going forward? And are there any anomalies as far as lending practices of banks are concerned wherein Muthoot has remained sacrosanct? Thank you.
Oh, so many questions anyway. The first question was about the customer addition.
Yeah. New customers.
There has been substantial new customer addition this quarter also. So I don't know from where you said there was a reduction.
So it's not a pure gold price function. If you look at slide number 44, you can see that the new customers have significantly increased every quarter. Q1 , we added INR 4.57 lakhs. Q2 , INR 4.34 lakhs. Q3, INR 4.17 lakhs. All these disbursements adds up to almost like INR 15,000 crores. So that is a significant improvement. And now our customer addition net basis, it has increased by during these nine months, it has increased from INR 87 lakhs to number of loan accounts has increased from INR 87 lakhs-INR 99 lakhs, almost INR 1 crore loan accounts. Customers have net customer base has increased from INR 56 lakhs-INR 62 lakhs. So there is a significant improvement. It is not a pure gold price play in this. When the price of the underlying commodity goes up, we cannot expect people to bring in more and more jewelry.
They will bring only the required amount for the required space. They want INR 2 lakhs. They will bring only jewelry worth INR 2 lakhs at today's price. So every loan, the older loan when it gets closed, the proportion, the LTV there must have been much lesser. So 20 grams will go when the same amount is repaid taken by another customer, he needs to bring only 18 grams. That's the difference.
Can you repeat your second question?
Yeah. So there has been anomalies as far as gold lending NPAs are concerned for banks. And even ministry has been highlighting that for now and then. I mean, I understand it's a highly recoverable asset, and GNPA might not be the right parameter to judge a business like yours. But still, how are we sacrosanct vis-à-vis the anomalies that banks are facing in the gold lending segment?
If you avoid the discussions with banks, I will tell you what is in our, what we do. As a stated policy, we would like to give more time to the customer. We wouldn't like to auction this gold just at the drop of a hat. So just because it has become NPA, we don't auction the gold. If the customer comes back, comes to us, and requests the branch for some more time, maybe two months, three months, etc., if we see that we are in the money, we would rather give the customer more time than auction this gold just because it is an NPA. That is our stated policy, and that is what we do, and that is why customers flock back to us again for the next loan. So they feel that we are not very harsh in this auction business.
So probably we have 4.2% of our NPA, but then it is not. It is 100% principal and interest is safe there or it is secured in the book. So we don't mind keeping a part of it as an NPA. Of course, because knowing very well that it will never translate into a loan loss for us. So over the last decades, we have never had an NPA. Because of an NPA, we have a loan loss. So that is why we try to adjust or accommodate the customer as far as possible. So in the next two, three months, many of them will pay interest or will close their account, etc., but then we are saving an auction. We are actually helping the customer not to auction this gold. That is our policy. So we would see.
We would like to keep this NPA also around this 4.2%-4.3%, that level going forward also. If things are at that, we would like to bring it down also. But we wouldn't be concerned even if it is 4.2% or 4.3%.
So that is well understood. Second part of the question was there were certain anomalies as far as gold lending customer bases concerned, especially for banks. How is our customer base and underwriting practices sacrosanct vis-à-vis the anomalies that have been observed for banks in the gold lending segment?
I don't know what are the anomalies seen in the bank. If you can say the anomaly, then I will say whether the anomaly is there with us.
So there have been observations on LTV, transparency, and renewal of loans without the closure of existing loans. Plus, ministry have also highlighted rising GNPAs in the gold lending segment. So I understood the Muthoot part, but I'm just talking more because you are the industry veteran. So talking more from the industry perspective on how this customer segment is behaving vis-à-vis gold financiers versus bank-led gold loan customers.
Okay. Gold loan is one of the best products which a customer can get today. It is itself not a loan which is increasing its leverage. It is the best loan which is available today where customers are not able to get personal loans. They're not able to get a microfinance loan. They're not able to get other types of loans. The issue is this gold, and people are generally very happy taking a gold loan.
No debt trap.
Yeah. And the customers don't get into a debt trap also. So this is something which needs to be encouraged. So some banks have some wrong practices, it is not there in Muthoot. We are doing what is definitely required and what is in the line, and that is what Muthoot stands for. That is why you see that we have the largest gold loan portfolio among all the other NBFCs. So the practices which we do are definitely good and definitely in line with what the customer needs, and that is what we'll be looking at. What banks do, what they don't do is not for me to comment, or what the ministry said also is not for me to comment.
Thank you. The next question is from the line of Kamal Mulchandani from Investec Capital Services. Please go ahead.
Hello sir. Thank you for the opportunity. So firstly on the gold loan part, if you could just give some color, what is the policy on the loan rollover by Muthoot? Do we net off the loan or the customer pays the loan completely at the maturity, and then we give 100% new loan to the customer? So what is the policy over rollover?
Any loan which is given as a new loan or a renewal is only done at the current LTV. The current LTV is 75%. It is done only at 75%. So that is the loan policy we have, and that is what we have been doing till now also.
So supposedly on the maturity date, if the loan LTV, the value of the gold has increased and I can avail further loan basis to new gold price, so will I be required to repay my earlier loan, or you couldn't give an additional amount over and above whatever the difference in the LTV is? So how do we do that?
So if the customer requests for that, we can as long as it is within the LTV.
Okay sir. Thank you so much for that. So on the MFI part, can you please help us? What is the PAR Zero number?
PAR? Just a second.
We'll get that number.
We'll get that back. Okay. We'll get that to you later. You'll get it.
Okay. Sir, do we have some color over what is happening in Karnataka and what is the percentage of portfolio in Karnataka, and are we facing some issues in collection with the government uncertainty going around?
No, I don't think there is any problem as yet. Of course, there are some talks about Karnataka bringing some gold, etc., and there is also some talk about somebody overriding that gold or staying that gold also. That's all there. But I think nothing specific for us there in Karnataka, and the portfolio in Karnataka, I don't know the exact number. It's very small also.
Okay. Got it. Thank you so much, sir. It would be great if you could just provide us the PAR 0 number.
Yeah. Yeah. Yeah. Thank you.
That's it from my side.
Thank you. Thank you, sir. Before we take the next question, a reminder to the participants, if you wish to join the question queue, you may press star and one on your touch-tone telephone. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.
Yeah. Good evening, everyone. Thank you for taking my question. Firstly, congratulations on a good quarter. We need your help in understanding some things.
Sir, your voice is sounding very muffled . Are you connected on your earphones? I would request you to please switch to your handset, sir.
Is it better now?
Yes, sir. Please go ahead.
Yes. Yeah. So what I was saying is we need your help in understanding some of the regulatory developments that some of the other gold loan players, including NBFCs and small finance banks, who's spoken about these developments in this quarter. So first thing is, I mean, what some of the other gold loan players are saying is the regulator is asking that LTV, instead of being capped at 75% at the time of disbursements, should remain at 75% during the entire tenor of the loan. And what this means is that at the time of disbursement, the LTV that one can give out will actually be lower depending on what will be the accrued interest during the tenor of the loan.
The second thing, sir, I mean, when RBI had come out with guidelines, they had also shown or talked about something around, I would say, renewal or rollover of gold loans at the time of maturity. Just trying to understand, is the RBI now asking that you start making some additional provisions if you are rolling over loans at the time of maturity? So if you can just help us understand these two developments, if any, on the regulatory side, that will be very useful. Thank you so much.
Actually, no two developments on this. The RBI has always been saying these things, but there are no new regulatory, no new developments on this, and we are doing business as usual.
Got it, sir. And so just one last thing, while a lot of discussion has already happened on the level of GNPAs and when you will eventually want to auction the loan, all those points are very well received. I'm just trying to understand, given that now we are in Q4, we'll be closing the March numbers, is there a certain level of GNPA that you will want to be at, right, and because of which you might want to look at some auctioning in Q4?
Auction is not related to Q4 or Q3, etc. Auction is something which we do always. So definitely, whenever we need to do auctions, we'll do auctions also. So if the GNPA, the customers are not forthcoming, and we feel that they are not going to take back the gold, and they are not going to renew, they are not going to close the loan, we'll have to do auctions. But that's our very last, last, last resort. So if there is something to be done this quarter, we'll definitely do it. But we'll try to see that our GNPA, etc., is within this 4.3%, 4.2%, etc.
Got it, sir. Got it. This is useful. That's all from my side. Congratulations and all the very best to you here. Thank you.
Thank you. Thank you. Thank you. Thank you.
There was a question on what is the microfinance exposure in Karnataka. That is about INR 900 crores, and PAR 0 is INR 7,850 crores. That is about 90.5% of the total portfolio.
Abhijit, sir, does that answer your question?
Yeah. Thank you so much.
Thank you. We take the next question from the line of Shreepal Doshi from Equirius. Please go ahead.
Hi sir. Thank you for giving me the opportunity. The first question, sir, was again on the regulatory front. So has there been any communication with the regulator on the bullet repayment as a product? And there has been some, I mean, the regulator has, in a way, highlighted to have an EMI as a product in the gold loan category as well. So is there any communication, or has there been any discussion on this particular aspect?
No, sir. No. No discussion.
Okay. And then secondly, just, I mean, touching again on the earlier participant's question on 75% LTV throughout the tenure and at the time of disbursement. So we are following the policy of 75% LTV at the time of disbursement, and then we do not really look at how it is moving throughout the tenure.
We have not made any change there, and we have not heard anything from the regulator also.
Got it, sir. So the third question was on the instant personal loan category. So there, as you highlighted from INR 190 crore, I mean, the non-gold NP has increased to almost INR 300 crore. So is it predominantly coming from this particular segment, or is it some other segment also?
Sir, we are losing your audio. We are not able to hear you clearly.
300 crores is from personal loans, from business loans, from land, and in-stock loans. All put together. And the portfolio has also grown, sir.
Okay. So, sir, how is the particular instant personal loan portfolio in terms of GNPA, particularly for this segment, and credit cost here, sir?
I think quite good, quite nice because it is given to customers who are known by Muthoot. Already customers, sir.
So this would be predominantly.
100% provided for all NPA accounts under non-gold. We are providing 100%.
Right. So just one aspect there. So this instant PL would be to our captive gold customers only, right?
Not captive gold customers. Customers who have had business with Muthoot.
All right. All right. And just last question. What would be the auction during the quarter?
Around INR 60 crores.
INR 60 crores.
And for nine months, sir? The whole nine month FY 2025?
I'll get back to you. Not a big number, I think.
Sure, sir. Sure. Thank you so much, sir, and good luck for the next quarter.
Thank you. We take the next question from the line of Raghav Garg from Ambit Capital. Please go ahead.
Sir, thanks. One of my questions has been answered. My other question is, what is the interest accrued outstanding as of December on the books?
INR 1,851 crores .
Sorry, INR 1,851 crores. Is that correct?
Correct.
Okay. I'm not able to hear you properly. I'm sorry.
I'm sorry to interrupt you, sir. We are losing your audio. Participants, please reconnect us. I will reconnect the management line. We have the management line reconnected. Please go ahead, sir.
Thanks. Sir, my other question was, I wanted to understand your rationale behind transforming Muthoot Money into gold loan business. Why is it that you cannot absorb those branches into the standalone business? Why do you have to do it as a separate business, even though the nature of the business is same as a standalone entity or a parent entity?
That's why it's called transformation. Earlier, we were doing vehicle loan business, and that's upside, right? We were doing vehicle loan business.
Just doing vehicle loan business initially, that vehicle loan portfolio is running down. It's still some vehicle loans are still there. So it was not making money. So that is why we started the gold loan business. That's why we started the gold loan business.
Okay, so do you plan to absorb this entity at some point in the future into the parent entity?
That's a decision for the board to take. I think we are not at all.
Understood. And do you see any regulatory risk here? Because I think for gold loan branch expansion, you have to take the RBI's approval. Will that apply in this case as well, in case of Muthoot Money once you transform it completely?
Muthoot Money, once it crosses 1,000+ [audio distortion] regulations will apply.
Understood. That's all from my side. Thank you.
Earlier, there was a question on auctions. So the nine-month auction is around INR 382 crores. INR 382 crores is a full year's auction, nine months. Somebody has asked for it. Hello?
Raghav sir, does that answer your question?
Yes, yes. I'm good. Thank you.
Thank you, sir. We take the next question from the line of Umang Shah from Kotak Mutual Fund. Please go ahead.
Yeah. Hi. Good evening. Thanks for taking my question. Sir, I just wanted one clarification. So the non-gold loan portfolio where these customers who are is it fair to assume all of these are active Muthoot customers, or these could possibly be customers who have been Muthoot customers in the past?
There are customers of Muthoot. There are non-customers of Muthoot also. It's a mix. It's not that they are fully customers of existing or past customers. There are entirely new customers who have had no business with Muthoot Finance also have come in there.
Sure. And sir, typically, out of this INR 4,500 crore worth of loans, what proportion of loans or customers would also have active gold loan at this point of time with us?
We wouldn't have looked at that number. We wouldn't have looked because it is not on the active gold loan customer we are giving the loan. We're giving the loan based on the underwriting for the person. The gold loan is not a criterion there at all.
Sure. But it's a possibility that they might also have a gold loan which is probably active.
Definitely. Definitely. Somebody who has taken a personal loan from other NBFCs also will have a gold loan with Muthoot, probably. So I don't know.
Understood. Okay. Understood. Sure. That was my question. Thank you.
Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead.
Hi. I just wanted to understand the total number of customers we bank on a monthly basis. Of them, the number of customers who have got two gold loans with us, the number of customers who have got three gold loans, and the number of customers who have got four plus gold loans with us. Thanks.
Shubhranshu , your voice was not clear. Can you repeat?
Can you repeat that once more?
Hi. Hi. I hope my voice is clear now. I wanted to understand the total number of customers we bank on a monthly basis, the number of Muthoot accounts we bank on a monthly basis. The second part of these, how many customers have two gold loans with us, how many customers have three gold loans with us, and how many customers have four plus gold loans with us.
Shubhranshu , there is a slide, slide number 44, which talks about the new customers we onboard. You can take that as a number of new customers onboarded because the other portfolio is negligible. So you can simply ignore those non-gold customers getting added.
No, no. I'm not asking for non-gold customers. I'm asking for the number of gold loan customers we bank on a monthly basis.
I don't have the monthly numbers. Quarterly, it is roughly around INR 4.1 lakh-INR 4.3 lakh customers.
Okay. Of these, how many customers would have two gold loans, three gold loans, and four plus gold loans?
That number we don't have. Somebody having more than customers with two gold loans, customers with three gold loans, customers with four gold loans. We don't have that on hand, sir.
So if you simply add INR 1 crore by INR 60 lakhs, every customer will have about 1.25-1.3 . 1.5 is the average. So simply divide one [audio distortion] Are there more questions?
No, there are no more questions. I'll take this offline. Thanks.
Yeah.
Thank you. The next question is from the line of Bhaskar Basu from Jefferies. Please go ahead.
Thanks. I just had one question. When I look at your ALM for the last couple of years, almost 40% of your borrowings ex NCDs mature in the first six months and around another 30% in the remaining six months. So almost 70% matures. And just wanted to clarify, I mean, there was a question earlier also. These are all one-year MCLR linked, or do you have shorter MCLR as well? Because these seem to be shorter maturity loans.
So no, I think I answered this question earlier. We have roughly around 20% of the bank loans that are short-term. The rest are all long-term loans. So the short-term loan, the reset happens on maturity. Long-term loans, mostly it is annual reset.
Yeah, but every year, almost 70% matures within the year, so which is why when you say long-term loans, what would be the tenure for these loans?
So when you look at the ALM, you might be seeing the installments also. Because term loans are quarterly installments. There's no reset happening. That's why that payment is shown in the ALM statement.
Okay, so basically, 20% is shorter tenure of these.
20% is shorter tenure. The rest will be term loans where the reset happens annually, whatever is the residual balance outstanding as of that date.
Okay. Okay. No, thanks. That was my only question.
Thank you. The next question is from the line of Aditya Vikram from Digit Insurance . Please go ahead.
Hi. Thank you very much for allowing me to ask the questions. So sir, you had revised the guidance last quarter. Are we sticking to the same guidance for this year as well? Apologies if you have already answered this.
Yeah. So last quarter, we revised the guidance from 15%- 24% for the whole year. But in the Q3, we overachieved it. We have reached 29%. Suddenly, we are not, again, revising the number. Suddenly, we are expecting a growth to happen in the Q4.
Okay. So just to follow up, somewhere in your presentation, I read that you have written that there is a cautious approach. So is that only for microfinance business, or that is for the entire firm at a consolidated level?
Yeah. Mainly for the microfinance business.
Okay. My second question, sir, then is your GNPA and net NPA come down primarily because, of course, the AUM has increased. But on a net basis, do you see any stress overall in the economy, or do you think that we are sticking to the number which we have?
There definitely can be stress in the economy. That's what I am hearing. We don't see it, sir. But I am reading everywhere there is stress in the economy, stress in the economy. But then that is helping in the gold loan business because people are not getting money elsewhere. They're coming for gold loans. That's what we can understand in this.
Okay. So what is your net increase for like-for-like basis between the quarters in the AUM, the NPA side?
So on the NPA, September quarter, it was INR 3,088 crores. December, it is INR 4,117 crores. So there is an increase of around INR 230 crores quarter- on- quarter.
What was September to July quarter? Sorry if you can answer that one. September to June, apologies.
June, it was INR 3,353 crores. That is about a INR 530 crores increase.
Okay. Thank you very much, sir. Appreciate it.
We are expecting the NPA numbers to come down by March.
In gold loan business, we don't have that many.
I'm sorry, sir. We are unable to hear you clearly.
In gold loan business, these NPA numbers don't matter.
I'm sorry to interrupt. We are not able to hear you.
Thank you. Okay. There's not much answer required there also. The question is over.
We take the next question from the line of Kushan Parikh from Morgan Stanley. Please go ahead.
Hi sir. Thanks for taking my question. I had three questions. The first on the loan growth guidance. We understand your guidance for FY 2025, but if you could also refresh your guidance for FY 2026 in terms of loan growth. My second question is around the credit cost. On the credit cost, basically, we are looking for maybe stable or slightly better asset quality GNPA in the next quarter. Does that mean that credit cost for Q4 will remain broadly in the same range as Q2 and Q3? And if you could also, given the non-gold portfolio is doing faster at the standalone level, if you could give some credit cost guidance going forward as well for the standalone book. And lastly, just one data-keeping question. If you could give the loan book split by ticket size for the gold loan.
Sorry, one by one. The guidance for 2026, as usual, we are giving only the usual 15% guidance for 2026 also. We will revisit it after next quarter. So that is the first part of the question. The second was the credit cost. If you are saying credit cost or GNPA, credit cost is.
Credit cost primarily comes from the loan growth. If there is a loan growth, we have to mark 1% with the current ECL provision 1% credit cost.
Can you hear? Can you hear?
Yeah. I'm listening.
Yeah. So 1% provisioning we have to do. Any NPA increase, roughly around 10% provisioning we have to do. So to the extent 1% increase will happen, to the extent of NPA reduction happening, we'll get some benefit on credit cost.
Understood. That's quite clear. And going forward with the share of non-gold loans rising in the standalone book, if you could give some guidance around that. I mean, do we provide a higher percentage to the standard assets for the non-gold loan book versus the gold loan book, or it's the same 1%?
So we provide a higher.
The non-gold loan book today is INR 4,500 crores only. And the gold loan book is INR 92,000 crores. So both will be growing. So it is not that one is growing faster than the other. Both will be growing.
Understood. Understood. And sir, on the last question of the loan book split.
So up to INR 1 lakh, it is 30%. I mean, up to INR 1 lakh, it is 30%. INR 1 lakh-INR 3 lakhs, it is 32%. And above INR 3 lakhs is the rest. I think it's around 34%.
Understood. That's all from my side. Thank you.
Thank you. We take the next question from the line of Anuj Singla from Bank of America. Please go ahead.
Good evening, sir. And thanks for the opportunity. Sir, on the ECL, which you have given on slide number 48, just one question. We have seen an improvement in stage two and three on a sequential basis. But when I look at the total ECL, it's gone up by around eight basis points on a Q-Q basis. So my assessment is that the PCR, you have increased the coverage across the various stages. Can you verify that and also give us a sense of what is driving this?
Yeah. So we explained this earlier. So in terms of non-gold portfolio, the NPA book, we make a 100% provision. So in the secured loan, there is a slight increase in the NPA. So that is the reason why that provision has increased.
Okay, so the composition of the GNPAs now has significantly higher non-gold portfolio. That is what you're saying, and that is why the PCR has gone up.
The non-gold NPA is only around INR 300 crores out of INR 4,117 crores.
Got it. Got it, sir. Got it. Thank you.
Thank you. Ladies and gentlemen, we take that as the last question for today. I would now like to hand the conference over to the management for closing comments.
Yeah. We are quite happy that we had some lively discussions here. As usual, we remain committed to the company. We remain committed to serving the interests of all our stakeholders, the investors, the lenders, the regulators, and definitely our customers. So we will do all what is required to see that all our stakeholders are adequately looked after, and we stay committed to do good and quality business in coming days also. Again, once again, thanking you all for a lively participation. We look forward to, in the next quarter, to meeting you again. Thank you and goodbye.
Thank you. Thank you, Sanket.
Thank you, members of the management. On behalf of DAM Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.