'Gold loan NPAs don't translate into losses'

Muthoot Finance's Q3FY25 net profit rose 33% to ₹1,363 crore, driven by strong demand for gold loans. Managing director George Alexander Muthoot speaks to Narayanan V about the factors behind the profit surge, record AUM growth, future targets and challenges in its microfinance subsidiary.

- George Alexander Muthoot, Managing Director, Muthoot Finance

Muthoot Finance's Q3FY25 net profit rose 33% to ₹1,363 crore, driven by strong demand for gold loans. Managing director George Alexander Muthoot speaks to Narayanan V about the factors behind the profit surge, record AUM growth, future targets and challenges in its microfinance subsidiary.

What drove the 33% increase in net profit during the quarter?

Profit is only a direct function of AUM growth. In Q3FY25, our standalone loan AUM saw a significant rise of ₹26,305 crore, driven by a strong 37% y-o-y growth in our core gold loan portfolio. As of December 2024, our standalone gold loan AUM stood at ₹97,487 crore. There was a surge in demand for gold loans, particularly during the festive season. This was largely due to lenders slowing down on personal loans and microfinance disbursals. However, people still needed funds for consumption and other expenses, leaving gold loans as the next best option—which is exactly what happened.