Muthoot Finances (MUTH) 1QFY19 PAT grew 43% YoY to INR4.9b, driven by a pick-up in loan growth, a reduction in GNPLs and a lower C/I ratio. 5 September 2018 With interest write-backs on account of declining GNPLs and lower cost of funds, NII increased 31% YoY. Note that next quarter onward, the base for cost of funds will become unfavorable and MUTH is likely to witness a sharp increase in cost of funds thereafter. MUTH raised INR30b worth of NCDs in a private placement during the quarter. Under Ind-AS, 1QFY18 PAT was 2% lower; FY17 networth was unchanged. Muthoot Homefin increased its loan book almost 3x to INR16b, with PAT up ~3x to INR110m. Belstars loan book grew 86% YoY to INR12b, with PAT almost tripling to INR140m. We increase our FY19/20 estimates by ~15% to factor in stronger growth and lower credit costs under Ind-AS.