Muthoot Microfin Limited Investor Conference Call Summary
Submission Details
• Date of submission: May 10, 2024
• Transcript of investor call regarding Q4 and FY 2024 results
• Call date: May 7, 2024
• Directed to: BSE Limited and National Stock Exchange of India
• Key management present: MD, CEO, CFO, COO
• Hosted by: JM Financial
• Signed by: Neethu Ajay, Company Secretary and Chief Compliance Officer
Financial Highlights
• IPO Success: Raised INR 960 crores for business expansion
• Loan Disbursements: Record of INR 10,661 crores, 32% YoY increase
• Branch Expansion: Added 336 branches, total of 1,500 across 19 states
• Asset Growth: AUM increased by 32% to INR 12,194 crores
• Customer Base: Grew by 21% to 3.35 million
• Portfolio Quality: GNPA at 2.29%, net NPA at 0.35%, collection efficiency at 98.4%
• Profit: Record profit of INR 449 crores, ROA at 4.2%, ROE at 20.3%
• Future Projections: Aiming for ROA of 4.3% to 4.5% and ROE above 20%
Branch Expansion Strategy
• Northern Expansion: Diversification strategy targeting balanced market presence
• Current Performance: 23% of disbursements from northern branches, growing faster than southern branches
• Credit Cost: Low at 1.2%, new branches break even in 9-10 months
Risk Assessment and Customer Focus
• Equifax Scorecard: 97% of disbursements to low-risk customers, overall NPA at 1.77%
• Interest Rates: Reduced but net interest margin remains robust at 12.7%
• Client Retention: Over 90% due to customized products and efficient service
• Digital Offerings: Suvidha loan expected to improve cost-to-income ratio
Regulatory Compliance and Market Conditions
• Regulatory Scrutiny: Increased regulations beneficial for customer protection
• Election Impact: Minor exposure in Punjab, no significant business impact noted
• Loan Ticket Sizes: Increased by 10% focusing on low-risk customers
Co-Lending Strategy
• Current Co-Lending Portfolio: Constitutes about 2% of total portfolio
• Partnerships: Collaborations with banks like Axis Bank
• Co-Lending Ratios: Typically 75:25 or 70:30 to mitigate regulatory risks
• Long-term Goals: Aim for co-lending to reach 5% to 7% of total portfolio
Core Business Focus
• Microfinance Commitment: Core business focus with additional products like gold and two-wheeler finance
• No Housing Finance Plans: Requires separate licensing
• State Expansion: Plans to enter Andhra Pradesh, deeper penetration in existing markets
• Portfolio Quality Improvement: GNPA reduced from 2.97% to 2.29%, net NPA from 0.6% to 0.35%
Conclusion
• The call concluded with thanks from the moderator and management, emphasizing Muthoot Microfin's growth and strategic focus.

Muthoot Microfin Limited Investor Conference Call Summary
Overview
• Date of call: January 30, 2024
• Transcript submitted on: February 2, 2024
• Hosted by: JM Financial Services
• Key management present: Managing Director, CEO, COO, CFO
• Compliance: SEBI regulations
Company Performance
• Recent Achievements:
• Successful IPO raising approximately 960 Crores
• Focus on microfinance for financial inclusion, especially for women
• Financial Metrics:
• 38.6% year-on-year growth in Assets Under Management (AUM) to 11,458 Crores
• 20% increase in loan disbursements
• 119.1% rise in Profit After Tax (PAT) to 124 Crores
• Expanded branch network to 1,424 and active client base to 3.28 million
• Gross Non-Performing Asset (GNPA) ratio: 2.29%
• Collection efficiency: 98.4%
Risk Management and Underwriting
• Post-COVID Performance:
• 97% of loan book with GNPA ratio of 1.2%
• Utilization of a credit scorecard developed with Equifax for risk assessment
• Delinquency rate of 0.41% among very low-risk customers
• Portfolio Diversification:
• Focus on low-risk customers
• Digital collections account for 28% of total collections
Future Outlook
• Anticipated improvements in ratings and funding costs
• Targeting net interest margin (NIM) of 12.7% and return on funds (ROF) of 4.2% to 4.5%
Q&A Highlights
• Nat Cat Insurance:
• Claims of approximately 7 Crores reported, aiding portfolio health
• Cost Ratios:
• Improved operating leverage and technology adoption contributing to efficiency
• Funding Costs:
• Some benefits to borrowers while maintaining NIM around 12.7%
• Distribution Strategy:
• Multi-pronged approach to manage concentration risk
• 96% of branches in rural areas, focusing on new customer acquisition
• Securitization Limits:
• Off-balance sheet portfolios limited to 15% of AUM
Regulatory Environment
• Recent RBI guidelines expected to prevent excessive lending in microfinance
• IPO funds being utilized to enhance capital base for further lending
Conclusion
• Muthoot Microfin Limited is positioned for sustainable growth while effectively managing risks and maintaining asset quality.