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00:00Welcome back. You're watching Market IQ here on NDTV Profit. I'm Harsh Saita and with me
00:11we're in the thick of earnings is Alexander George Mathood. Apologies. Joint Managing
00:16Director for Mathood Finance. Welcome, sir. Good afternoon. Sir, I want to first off try
00:23and understand what's happening on the growth front and two questions here. One very strong
00:29growth. You're not revising your growth guidance. 75 percent of your growth guidance already
00:35met for the full year in the first quarter itself. Why wouldn't you revise growth guidance?
00:39And second, I want to also try and understand what's driving this kind of growth. OK, thank
00:45you so much for that intro. Our consolidated loan AUM has grown by 28 percent by and by
00:53to 98,048 crores and our standalone AUM has grown by 25 percent to 84,324 crores. This
01:00in fact has been the highest ever for us in any quarter historically. And our PAT also
01:05has grown by 1,196 crores. We've had a very strong quarter, quarter one. It's because
01:12of we have increased the per branch productivity levels also. The per branch AUM has also gone
01:16up. So we're seeing a good trend in the dispersals. But at the same time, we're taking a lot of
01:21initiatives to get there, especially on the new customer acquisition side. You would have
01:26seen that we've had the highest ever gold loan disbursement in any quarter at 73,648
01:32crores. And we've also had the highest ever gold loan disbursement to new customers in
01:36any quarter, which is around 5,651 crores. We've also had the highest ever in gold loan
01:42AUM at 23 percent by and by at 14,883 crores. So while we have registered these historic
01:48numbers in one quarter, the board will reconvene after six months, which is H2. And we will
01:54look at the guidance at that time. We usually every year, we take a guidance of about 15
01:59percent or so, but we would not like to revise the guidance so quickly just based on one
02:05quarter's performance. We would wait to see how quarter two also pans out and then we
02:08will take a more prudent decision at the end of quarter two. As far as the growth trajectory
02:14is concerned, you all know our core focus remains on our core product, which is gold
02:18financing. And we have taken a lot of initiatives in terms of our marketing initiatives. We
02:23have launched many new campaigns. And we as an industry leader, category leader, have
02:27always looked at expanding the market share, increasing new customers, which has translated
02:31into the numbers that you just saw. So we are constantly investing in those initiatives,
02:36newer initiatives, digital outreach, digital marketing, many newer initiatives that we
02:40are doing to calibrate our per-branch productivity levels to go up. So we are taking a lot of
02:45initiatives strategically from a long-term perspective. We are also adding branches.
02:51The group overall has added over 200 odd branches in this year, year on year growth. So between
02:58new branches, existing branches, productivity growing up, newer marketing initiatives, digital
03:02initiatives, the per-branch productivity level has grown up from 13.93 crores to about 16.67
03:09crores of AUM per branch. So that is clearly reflected in this kind of performance that
03:13you're seeing and the gold loan disbursements, and especially the new customer acquisition
03:17that has happened so far in quarter one.
03:19Right. Mr. Muthu, just with regard to competitive intensity, has that contributed to growth
03:24as well? And if competition were to come back, we have one financier which is sitting on
03:29the sidelines due to an embargo. If that were to reverse, would that impact your growth
03:34number as well?
03:37Interesting question. We have been the category leader for a long time, and we have had many
03:42competitors come, private sector, public sector, fintechs. But I think with every competitor
03:47coming in, we have only strengthened our resolve to maintain that category leadership. And
03:52we've demonstrated that with our numbers every quarter. So whether it is one player who has
03:57gone out of the market or two players is insignificant to us. For us, our focus remains on maintaining
04:03our leadership position, category leadership through various customer centricity initiatives
04:08that we do. We are, as you know, India's number one most trusted financial services brand
04:13for the last eight years in a row. And with our high level of corporate governance standards
04:17and the trust that we maintain with our customers, the repeat customers that come to us, we enjoy
04:21that kind of relationship banking that we have maintained with our customers. So as
04:26competition comes in, I only see opportunities for us to grow even bigger and faster because
04:32competition only makes us understand that there is a lot of potential in the sector.
04:37And with our market expansion strategies, newer branches coming up and newer geographies,
04:41we are only poised to grow with a clear mandate to grow the per branch productivity level
04:47and adding new branches and new customers. So we've always maintained that focus. We
04:51have never detracted that focus whether competition comes in or not. We are very clear about what
04:55we want to do, what are our plans for the year and how we're going to execute those
04:58plans meticulously.
04:59Right. And so with regard to provisioning, it's been elevated this quarter. Also, does
05:05this mean that, talk to us about why that is so and also do NPA ratios get better and
05:10asset quality ratios get better starting next quarter itself? Is that what one can expect?
05:15So apologies, but we have, we're short on time. So if you can quickly give us a brief
05:20on that. Thank you.
05:21Okay. As far as NPA is concerned, you all know that we have moved into the NDS provisioning
05:262018. As of 2018, we moved to the NDS. So in that we have to provide provisions for
05:32ECL, which is expected credit loss. So as far as stage one and stage two is concerned,
05:37we have provision for about 81 crores and stage three, we have provisioned about 130
05:41crores. But as you know, in the gold financing sector, our tenure of the loan is for about
05:46one year, post one year and another 90 days is when it goes into the NPA category. Muthoot
05:51Finance has always differentiated itself by giving extra time to our customers to repay
05:56their loans. In fact, on the NPA stage three assets, our LTV loan to value ratio is only
06:01at 54%, which is putting us in a very comfortable zone. And this is just a provisioning and
06:06it is just accounting standard that has led to a higher provisioning, but otherwise we
06:10are very comfortable. The overall LTV on the entire portfolio is only 63%. And within that
06:14in the stage three asset, it's only at 54%. And because it's a gold financing industry,
06:20we are in a very comfortable zone. So I don't think there's any such concern as such, but
06:24definitely we will be proactively reaching out to these customers and ensuring that we
06:28reduce this NPA numbers, which is just a very technical number for us.
06:32Understood. Thank you so much, Mr. Muthoot. It's been a pleasure speaking. Larger conversation
06:36warranted. We'll reach out for that. Thank you so much for this quick snapshot of the
06:40numbers completely out of time on this one. Stay tuned to NDTV Profit, more action on
06:44the other side.