1,500% Profit Growth: NBFC stock jumps 5% after announcing strong Q3 results

Synopsis: The shares of this Microfinance company rose 5% after Q3 results, driven by strong AUM of Rs 13,078.6 crore in Q3 FY26, improving asset quality, and a sharp 1,500% YoY surge in profits.

The shares of this company, which specialises in providing loans at affordable rates to women entrepreneurs in rural and semi-urban areas, with over 1,700 branches across 21 states, came into focus today after strong Q3 results.

With a market capitalization of Rs 3,275.15 crore, Muthoot Microfin Ltd’s shares on Tuesday made a day high of Rs 197.50 per share, up by 5 percent from its previous day’s close price of Rs 188.30 per share. The share of this company has gave return of 22.72 percent over the last year.

Results Highlights

QoQ View: The company reported a total revenue from operations declined by 3.6 percent to Rs 515.9 crore in Q3 FY26 from Rs 535.7 crore in Q2 FY26, and NIM grew 11 bps QoQ to 12 percent in Q3 FY26. Accompanied by a net profit growth of 104.6 percent QoQ to Rs 62.4 crore in Q3 FY26 from Rs 30.5 crore in Q2 FY26.

YoY View: The company reported a total revenue from operations declined by 17.6 percent to Rs 515.9 crore in Q3 FY26 from Rs 624.8 crore in Q2 FY26, and NIM degraded by 125 bps YoY to 12 percent in Q3 FY26. Accompanied by Net profit growth of 1,543 percent YoY to Rs 62.4 crore in Q3 FY26 from Rs 3.80 crore in Q3FY25.

Asset quality showed a mixed trend. GNPA stood at 4.40 percent in Q3 FY26, improving 21 bps QoQ but rising 137 bps YoY, while NNPA was at 1.34 percent, improving 7 bps QoQ yet higher by 7 bps YoY.

Muthoot Microfin Ltd reported a healthy third-quarter performance, with the cost-to-income ratio at 54.8 percent in Q3 FY26, reflecting a strong 501 bps QoQ improvement, despite a 1,101 bps YoY deterioration. The company delivered an average ROA of 1.9 percent and ROE of 9.1 percent during the quarter.

Business Highlights: The company reported a 5.4 percent YoY growth in GLP (Gross Loan Portfolio) to Rs 13,078.6 crore, alongside a 4.1 percent QoQ increase. Loan portfolio diversification improved, where 97.1 percent of loans were JLG (Joint Liability Group) loans, and only 2.9 percent were non-JLG in March 2025. By December 2025, the loan mix shifted to 88.1 percent JLG and 11.9 percent non-JLG, with the IL portfolio rising to Rs 1,097.6 crore, maintaining near-zero delinquencies.

Disbursements rose 22.5 percent YoY to Rs 2,492.2 crore in Q3 FY26, supported by 9.6 percent QoQ growth. During the quarter, 43 branches were consolidated, taking the total network to 1,691 branches, with 16,032 employees. Operating efficiency improved as opex(Operating Expense Ratio) declined to 6.5 percent from 7.0 percent in Q2.

The company strengthened its funding profile by raising Rs 450 crore through secured, rated, listed NCDs at coupons of 9.70 to 9.95 percent and $15 million via ECBs, taking total fund-raising to Rs 2,753.9 crore during the quarter.

Muthoot Microfin Limited (MML) is a leading Indian microfinance institution (NBFC-MFI) and the microfinance arm of the Muthoot Pappachan Group (Muthoot Blue). It specializes in providing collateral-free loans to women entrepreneurs in rural and semi-urban areas, with over 1,700 branches across 21 states.

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