Microfinance Institution Muthoot Microfin announced Q3FY26 results Financial Highlights: Total income stood at Rs 605.4 crore, while Pre-Provisioning Operating Profit (PPOP) was Rs 175.3 crore for the quarter. Profit After Tax stood at Rs 62.4 crore, a growth of 104.6% QoQ. Net Interest Margin remained healthy at 12.0%, up 11bps QoQ, with cost of funds declining by 17 bps QoQ to 10.43%. Disciplined underwriting and provisioning resulted in provisioning cost at 3.3%, well below FY26 guidance of 4-6%. Asset quality improved, with GNPA declining to 4.40% from 4.61% in Sep-25, while NNPA (net of Stage III provisions) reduced to 1.34% from 1.41% in Sep-25. Strong liquidity position, supported by Rs 1,280.9 crore of liquid funds and HQLA–GSec investments, along with DA/PTC sanctions of Rs 1,128.2 crore and unutilised term funding sanctions of Rs 2,329 crore. Digital adoption remained strong, with 27.8% of collections through digital channels such as UPI and the customer app, while 100% of disbursements were executed digitally. The Company continues to maintain a healthy Capital Adequacy Ratio of 26.4% with a Debt-Equity Ratio of 3.3x. At the end of the quarter, the Company maintain total Networth of Rs 2,768 crore. Business Highlights: GLP grew by 5.4% YoY from Rs 12,404.9 to Rs 13,078.6 crore and 4.1% QoQ. JLG and Non-JLG loan mix improved from 97.1 : 2.9 in Mar’25 to 88.1 : 11.9 in Dec’25, with small and micro enterprise IL portfolio growing to Rs 1,097.6 crore, having near-zero delinquency. Disbursements grew by 22.5% YoY from Rs 2,035.1 crore in Q3FY25 to Rs 2,492.2 crore in Q3FY26, with the company registering disbursement growth of 9.6% QoQ. 43 branches consolidated during the quarter; total branch network stood at 1,691, with employee strength of 16,032. Opex for the quarter reduced to 6.5% vs 7.0% in Q2. Recognised as Financial Inclusion Institution of the Year and awarded for Responsible Finance at the Inclusive Finance India Awards, instituted by ACCESS Development Services. Raised Rs 450 crore through secured, rated, listed NCDs at a coupon range of 9.70%– 9.95% per annum during the quarter and raised USD 15 million in ECB. Overall, Rs 2,753.9 crore was raised during the quarter. Thomas Muthoot, Chairman & Non-Executive Director, Muthoot Microfin, said: “The microfinance sector has emerged from a challenging phase with the industry gradually returning to a sustainable growth path. We are seeing a steady normalization in growth, underpinned by disciplined lending, improving borrower behaviour, and continued strengthening of grassroots fundamentals. Against this backdrop, Muthoot Microfin reported a strong performance, with positive trends across key operational and financial parameters. During the period, business momentum picked up, with assets under management crossing Rs 13,000 crore mark. Our diversification efforts also progressed well, with the individual loan book scaling past Rs 1,000 crore, and Micro-LAP disbursements picking up pace. This helped us expand our role from a microfinance lender to a long-term partner in our customers’ growth. Notably, the growth delivered was profitable, with Pre-Provisioning Operating Profit improved to Rs 175.3 crore in Q3FY26 from Rs 148.9 crore in Q2FY26. Profit After Tax stood at Rs 62.4 crore, registering a growth of 104.6% QoQ, underscoring prudent underwriting and focused risk management. Looking ahead, India is well-positioned for faster economic growth, with the rural economy playing a pivotal role. The Union Budget 2026–27’s emphasis on credit-linked livelihoods and allied agricultural activities is expected to support income diversification in rural areas, enhance borrower repayment capacity, and thereby strengthen the microfinance ecosystem while opening up new opportunities for responsible lenders. Accordingly, the Company remains well-positioned for sustainable growth as the sector advances. Our long-term strategy focuses on preserving asset quality, expanding financial inclusion, and maintaining a disciplined and prudent risk management framework.” Sadaf Sayeed, CEO, Muthoot Microfin, said: “Confidence in the sector is returning, driven by improving asset quality, lower delinquencies, better credit cost control, and a pickup in disbursements. For Muthoot, the quarter marks a key milestone with AUM reaching Rs 13,078.6 crore, up 5.4% YoY. Alongside this, our calibrated expansion into individual lending is gaining traction, strengthening portfolio diversification and long-term sustainability. The growth has been disciplined and profitable, with broad-based improvement across key performance indicators. NIM for the quarter improved to 12.0%, up 11 Bps QoQ, while Opex improved materially to 6.5% against 7.0% last quarter. Our strategic focus on underwriting has translated into continued improvement in asset quality, with GNPA at 4.4% and credit cost at 3.3% for Q3, well below our guided range of 4–6%. The improvement reflects tighter underwriting standards, improved collection efficiency, and the benefits of a more diversified portfolio mix. In parallel, during the quarter, we raised Rs 2,753.9 crore at a competitive cost of 9.8%, underscoring the confidence of lenders in our operating performance, balance sheet strength, and long-term growth outlook. Lastly, Muthoot Microfin was recognised as the Financial Inclusion Institution of the Year and honoured with the Responsible Finance for Sustainability award, reflecting the deep integration of financial inclusion and responsible lending within our operating philosophy. This is a recognition of our belief and commitment to wellbeing of our customers”. Result PDF