Muthoot Capital Services Limited returned to profitability in the quarter ended June 30, 2026 (Q1FY27), reporting a net profit of ₹81.22 crore compared to a net loss of ₹46.70 crore in the same period last year. The turnaround was driven by a significant improvement in asset quality and a reduction in finance costs, even as total income dipped slightly to ₹1,606.37 crore from ₹1,638.43 crore in the preceding quarter. The board approved the unaudited financial results on July 16, 2026, following a review by the Audit Committee and Statutory Auditors M/s. Sundaram & Srinivasan. An audio recording of the Investor Conference Call held on July 17, 2026, to discuss these results has been uploaded to the company website.

Asset Quality and Portfolio Performance

The company's asset quality improved substantially, with the Gross Non-Performing Assets (GNPA) ratio falling to 3.94% from 6.96% in Q4FY26. Net NPAs stood at 2.36%. This improvement was supported by the sale of a stressed loan portfolio with an aggregate principal outstanding of ₹203.01 crore to Prasaditya ARC Limited for a consideration of ₹93.20 crore. The transaction, conducted via the Swiss Challenge Method, included GNPA of ₹119.83 crore and written-off loans of ₹83.18 crore.

Assets Under Management (AUM) declined 1.88% quarter-on-quarter to ₹3,378.69 crore. The two-wheeler segment remained the largest contributor, accounting for 69.16% of the portfolio with an AUM of ₹2,255.06 crore. Disbursements for the quarter totaled ₹534.81 crore, a 5% increase from the previous quarter.

Financial Metrics

The company reported a Profit Before Tax of ₹108.54 crore for Q1FY27. Basic and Diluted Earnings Per Share (EPS) stood at ₹4.94 for the quarter, compared to a loss of ₹2.84 per share in Q1FY26. The Net Worth increased to ₹6,783.70 crore, and the Net Profit Margin was recorded at 3.19%.

Liquidity and Provisions

The liquidity position remains robust with a projected cumulative closing balance of ₹344.19 crore for Q2 FY27. Total inflows are estimated at ₹1,641.91 crore against outflows of ₹1,615.52 crore. The company maintained a Provision Coverage Ratio of 50.23% for NPAs and carried an additional management overlay of ₹20.47 crore as of June 30, 2026. Additionally, the company provided 100% provision for 8 fraud incidents totaling ₹91.80 lakh detected during the quarter.

Management Guidance and Strategy

During the earnings conference call, management highlighted a CRISIL rating upgrade to AA minus stable and the public deposit franchise crossing ₹100 crore as key achievements. The company stated that its retail portfolio grew to ₹2,851 crore, while the co-lending portfolio declined to ₹499 crore as it focuses on high-quality retail book growth. The management guided for an AUM of ₹4,000 crore to ₹4,200 crore for FY27 and reiterated a long-term aspiration of reaching ₹10,000 crore AUM by FY29. The company expects GNPA to remain sub-4% for the retail segment throughout the financial year.

Muthoot Capital Services Limited has strengthened its board governance by appointing Ms. Manimekhalai A as a Non-Executive Independent Director and re-appointing Mrs. Shirley Thomas for a second consecutive term. The Board of Directors approved these changes at its meeting held on July 16, 2026. These appointments are subject to shareholder approval via Special Resolution within stipulated timelines, enhancing the company's governance structure with experienced banking professionals.

Ms. Manimekhalai A has been appointed as an Additional Director effective July 16, 2026, until the ensuing General Meeting. Upon approval, she will serve as an Independent Director for five consecutive years. A distinguished banker with over three decades of experience, she previously served as Managing Director and CEO of Union Bank of India until her retirement in 2026. Her career includes leadership roles at Canara Bank and Vijaya Bank.

The Board also approved the re-appointment of Mrs. Shirley Thomas, whose current term expires on November 24, 2026. She has been re-appointed as a Non-Executive Independent Director for a second consecutive term of five years commencing November 25, 2026. Mrs. Shirley Thomas brings extensive experience from her tenure at the State Bank of India, where she held senior management roles including Senior Vice President and General Manager.

In addition to board changes, the company appointed M/s. K. Venkatachalam Aiyer & Co., Chartered Accountants, as the Tax Auditor for the Financial Year 2026-27. The firm, established in 1945, was appointed for a term of one financial year to conduct the tax audit under the provisions of the Income-tax Act, 1961.

Key Appointments