Muthoot Microfin shares hit 52-week low, fall over 45 pc in six months

Mumbai, March 11 (IANS) Muthoot Microfin Limited’s stock continued its downward trend on Tuesday, hitting a new 52-week low of Rs 123.65 in the intra-day trading session.

The stock dropped Rs 3.89, or over 3 per cent, to end the trading session at Rs 125.15 on the National Stock Exchange (NSE).

Investors have seen sharp losses in recent months. In the past five days, the stock declined by Rs 7.7, or 5.8 per cent.

Over the past month, it has fallen by Rs 25.9, or 17.16 per cent. The six-month decline stands at more than Rs 100, nearly 45 per cent of its value.

In the last five years, the stock has plunged over 50 per cent, losing Rs 126.15.

The stock’s poor performance comes amid weak financial results for the third quarter. Muthoot Microfin’s operating profit fell by 9.58 per cent to Rs 324.69 crore year-on-year (YoY).

Its profit after tax (PAT) saw a sharp decline of 96.95 per cent YoY, dropping to Rs 3.80 crore, according to its exchange filing dated February 6.

The company’s operating margin also weakened to 47.69 per cent, down by 23.40 per cent as compared to a year-ago period. Net income before taxes stood at Rs 5.06 crore, falling 96.1 per cent year-on-year.

In the second quarter of the current financial year (Q2 FY25), Muthoot Microfin’s net profit also fell 44 per cent to Rs 61.6 crore from Rs 110 crore in the same period last year (Q2 FY24).

The decline was mainly due to stress in the microfinance sector and higher employee costs, according to its exchange filing.

Despite the profit drop, the company’s operating profit grew 26 per cent to Rs 236 crore.

However, the lender had to set aside Rs 155 crore to cover bad loans, much higher than the Rs 41 crore kept aside a year ago.

The company’s bad loans also increased, with the gross non-performing assets (NPA) ratio rising to 2.7 per cent in Q2, compared to 2.3 per cent last year.

The decline in financial performance has impacted investor sentiment, adding to the stock’s struggles in recent months.

–IANS

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