Muthoot Capital Services, a part of the diversified Muthoot Pappachan Group, has reported 40 percent decline in net profit at Rs 13.6 crore for March quarter due to the problems plaguing the auto sector. It logged a profit of Rs 22.7 crore in January-March, 2018-19, according to a company statement.
The Kerala-based company is primarily into two-wheeler financing.
It reported an income of Rs 146.8 crore during the quarter under review, up from Rs 137.2 crore in the year-ago same period.
The company attributed the poor set of numbers primarily to the troubles in the auto industry arising from the switchover to BS-VI emission norms and also the disruptions caused by the COVID-19 pandemic in the last 15 days of the quarter.
The total disbursements of loans stood at Rs 347.5 crore during the quarter, taking the total assets under management to Rs 2,650 crore, which includes the assigned portfolio of Rs 52.3 crore.
In March quarter 2019, the company had a total disbursement of Rs 605.7 crore and loan book stood at Rs 2,744.6 crore. Revenue was Rs 137.2 crore.
Company's Managing Director Thomas George Muthoot described the quarter as challenging for all businesses, and especially for two-wheeler business.
“Escalation in price was one of the key deterrents to growth, with the introduction of ABS, and subsequent preparation of OEMs and dealers for BS-VI transition from April, besides the mandatory 5-year insurance. This was followed by once-in-a-century disruption in the form of the COVID-19 pandemic,” he said from Thiruvananthapuram.
Since there is adequate liquidity, Muthoot expects to claw back to business at the earliest when the normal returns which he expects towards the end of second quarter or early December quarter.
The company is also looking at all avenues for generating additional revenue and for this it has tied up with the group flagship and the leading gold loan finance player Muthoot Fincorp to source gold loan.
The company stock settled 1.33 percent higher at Rs 278.40 on BSE.