Muthoot Capital Services expands into north India

The company’s expansion in the north will be based out of Delhi.

The company plans to tap the huge potential available for 2 wheeler financing products starting with Delhi, Rajasthan and Punjab.

It will expand to other northern states also. This is part of the company’s plans of expansion pan India. The company also has plans to expand its operations to the eastern part of India in the later part of the year.

The Company’s Board of Directors approved the unaudited financial results of the company for the 1st quarter of the financial year ended till 30th June 2015. It Company has recorded net profit of Rs. 3.75 crores for the quarter ended 30.06.2015.

"The Company achieved a total income of Rs. 50.65 crores for the quarter ended 30.06.2015 which was higher by 12.06% compared to Rs. 45.20 crores for the quarter ended 30.06.2014. Financial expenses increased from Rs.19.21 crores to Rs.20.86 crores during the corresponding period, recording an increase of 8.59%.  Non-financial expenses increased from Rs.17.83 crores to Rs. 24.19 crores, which was an increase of 35.67%. As a result of the higher rate of increase in expenses contributed mainly by the increase in provisions, compared to the increase in revenues, the net profit declined to Rs.3.75 crores from Rs. 5.41 crores for the corresponding quarter last year," an official statement said.

"The Company disbursed 36734 loans amounting to Rs. 165.72 crores during the quarter ended 30.06.2015, compared to 29902 loans amounting to Rs.122.56 crores during the quarter ended 30.06.2014. The total loan portfolio of the Company increased to Rs. 878.16 crores as on 30.06.2015, compared to Rs.705.30 crores as on 30.06.2014, recording an increase of 24.51%. Compared to the level of Rs. 840.55 crores as on 31.03.2015, the increase has been 4.47%. The Company has 3,22,778 borrower customers as on 30.06.2015, compared to 2,58,391  customers as on 30.06.2014 (increase of 24.92%)  and 3,07,772 as on 31.03.2015 (increase of 4.87%)," it added.

Thomas George Muthoot, Managing Director, Muthoot Capital Services Limited said: “The Company is a leading provider of two wheeler finance in South India. The Company has already commenced expanding its business to North India. The plan is to expand operations to eastern states also later in the year. The Company’s aim is to consolidate its position as a national player in two wheeler financing segment. While the business and income have been growing, the reduction in net profit is on account of the 5 month norm for NPA and 0.30% standard asset provisioning adopted by the Company from the first quarter itself.”

R.Manomohanan, Chief Executive Officer of the company stated: “While the company has improved its business levels and recorded a higher income compared to the corresponding quarter last year, the net profit has contracted on account of a higher provision on Non-Performing Assets and reversal of income on account of the same. The company has adopted the changeover to 5 months norm for NPAs from this quarter itself, which is to be adopted by March 2016. It has also gone for 0.30% provisioning on standard assets from this quarter itself. However, the Company has definite plans to improve recovery and reduce NPAs. The immediate focus is going to be NPA reduction, aiming at substantial improvement by end of the current quarter. With aggressive strategies adopted for reducing the NPA, the financial performance of the company will improve.”

Muthoot Capital Services Ltd has recently launched ‘Ladies Only’ two wheeler loan scheme. Aimed at women, this scheme offers loans at 7.19 percent interest if the vehicle is registered in the woman’s name. The scheme which has been appreciated by women has been launched in all the eight states where Muthoot Capital has its presence.  While most of the disbursements have taken place in Kerala (70 percent), the company’s plan is to increase the reach and penetration in the other states as well.

"Due to the overwhelming response to the scheme, the women customer base of Muthoot Capital which was at 13 percent last year has now grown to 22 percent. With this growth rate, we hope that the women customer portfolio would be at least 35 percent by March 2016," said Thomas George Muthoot.

"The huge response to the scheme motivated us to scale up its reach to more states and the company has registered a total of 23,500 disbursements valued at Rs. 110 crores since its launch in October 2014. The company plans a total of 75,000 disbursements under the Ladies Only Scheme," he added.

The company will be popularising the scheme through a 360 degree campaign comprising of TV, Print, Radio, Outdoor, Cinema and Online media. Massive on-ground engagement activities, such as product display and scheme popularisation are planned in women’s collages/hostels and in government/ private offices where women work.