Shares of Muthoot Microfin Ltd. opened almost 4% higher on Thursday, October 8, after the microfinance arm of Muthoot Pappachan Group reported a 22% year-on-year (YoY) growth in assets under management (AUM) for the September quarter to ₹15,323 crore. The stock though, has given up all of those gains to trade with losses.
According to the company’s Q2FY27 business update shared with the exchanges on Thursday morning, its disbursements rose 28% from last year to ₹2,900 crore in the September quarter, while also increasing 10% when compared to the June quarter.
On asset quality, Muthoot Microfin’s collection efficiency stood at 98.11%, improving by 477 basis points from the year-ago quarter. Collection efficiency excluding advances stood at 99.9%, the company said.
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Portfolio diversification
Muthoot Microfin continued to diversify its loan portfolio, with the joint liability group (JLG) and non-JLG mix improving to 69:31 as of September 30, compared to 83:17 at the end of March 2026.
Its Small and Micro Enterprise individual loan portfolio increased to ₹4,164 crore, while maintaining near-zero delinquency. During the quarter, the company also disbursed ₹453 crore of gold loans under a referral and co-lending arrangement with parent company Muthoot Fincorp, strengthening its secured lending portfolio.
Funding and network
The company raised ₹3,213 crore during Q2, taking total borrowings for the first half of FY27 to ₹5,946 crore. As of September 30, it had liquidity of ₹1,701 crore and availed sanctioned credit lines worth ₹4,328 crore.
Its cost of funds declined to 9.93% during the quarter from 10.13% in Q1FY27, marking the first time it entered single-digit territory. Incremental cost of funds also improved to 9.69% from 9.80% sequentially.
As of September 30, Muthoot Microfin operated 1,675 branches and served 32 lakh active customers. The company continued expanding its presence in Telangana, Andhra Pradesh and Assam.
Digital collections increased to 47% in Q2FY27 from 25% a year ago and 40% in Q1FY27, while cumulative downloads of its Mahila Mitra app reached 22 lakh.
The company said the financial and operating figures are provisional and unaudited and remain subject to review by statutory auditors and approval by the Audit Committee and Board.
Having gained as much as 4% to an intraday high of ₹179.63, shares of Muthoot Microfin are trading 0.4% lower, fluctuating between gains and losses at ₹172.27. The stock is down 15% over the last one month.