Earning Call Transcript

August 12, 2026 BSE Limited National Stock Exchange of India Limited Corporate Relationship Department, Exchange Plaza, 5th Floor, 2nd Floor, New Trading Wing, Plot No. C/1, G Block, Rotunda Building, Bandra Kurla Complex, Bandra (E), P.J. Towers, Dalal Street, Mumbai 400 001 Mumbai 400 051 Scrip Code: 544055 Scrip Code: MUTHOOTMF Dear Madam/Sir, Sub: Transcript of Investor Conference Call of Muthoot Microfin Limited –Unaudited Financial Results for the quarter ended June 30, 2026 This is with reference to the intimation dated July 30, 2026, filed with stock exchanges, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, regarding the investor conference call to discuss the unaudited financial results for the quarter ended June 30, 2026, which was scheduled on August 07, 2026. We are enclosing the transcript of the earning call and the same is available on the website of the Company on the link: https://muthootmicrofin.com/financials-and-investor-presentations/?tab=6 We request you to kindly take the above information on record. Thanking you, Yours faithfully, For Muthoot Microfin Limited Neethu Ajay Chief Compliance Officer & Company Secretary “Muthoot Microfin Limited Q1 FY27 Earnings Conference Call” August 07, 2026 E&OE - This transcript is edited for factual errors. In case of discrepancy, the audio recordings uploaded on the stock exchanges on 7th August 2026 will prevail. MANAGEMENT: MR. THOMAS MUTHOOT – CHAIRMAN – MUTHOOT MICROFIN LIMITED MR. SADAF SAYEED – CHIEF EXECUTIVE OFFICER -- MUTHOOT MICROFIN LIMITED MR. PRAVEEN T. – CHIEF FINANCIAL OFFICER – MUTHOOT MICROFIN LIMITED MR. UDEESH ULLAS – CHIEF OPERATING OFFICER – MUTHOOT MICROFIN LIMITED MR. RAJAT GUPTA – SR. AVP, INVESTOR RELATIONS – MUTHOOT MICROFIN LIMITED MODERATOR: MR. ARUN NALKARA – JM FINANCIAL Page 1 of 18 Muthoot Microfin Limited August 07, 2026 Moderator: Ladies and gentlemen, good day, and welcome to the Muthoot Microfin Q1 FY27 Earnings Conference Call. As a reminder, all participant lines will be in a listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing star then zero on your touchtone phone. Please note this conference is being recorded. I now hand the conference over to Mr. Arun Nalkara from JM Financial. Thank you, and over to you, sir. Arun Nalkara: Thank you. Good morning, everyone, and welcome to the Q1 FY27 Earnings Conference Call for Muthoot Microfin Limited. First of all, I would like to thank the management of Muthoot Microfin for giving us this opportunity to host this call. From the management side, we have Mr. Thomas Muthoot, Chairman; Mr. Sadaf Sayeed, Chief Executive Officer; Mr. Praveen T., Chief Financial Officer; Mr. Udeesh Ullas, Chief Operating Officer; and Mr. Rajat Gupta, Sr. AVP, Investor Relations. I would now like to hand over the call to Mr. Sadaf Sayeed for his opening remarks, post which we can open the floor for Q&A. Thank you, and over to you, sir. Sadaf Sayeed: Thank you very much, Arun. Very good morning to all of you on behalf of Muthoot Microfin. I hope all of you would have received our investor presentation, financial results and also the press release. I mean before getting into the numbers, I just wanted to mention that this is a turnaround that we have been talking about the quarter 1 performance actually reflects what strategy that we have developed and articulated, it is getting into motion and getting into execution. If you look at the industry itself, the industry might have contracted in terms of AUM and numbers. But from the point of view of quality of assets, it has started to improve. The disbursement has started to improve. And there is a clear distinction between the well- capitalized, well-managed companies and some of the companies who are slightly at a lower AUM. So the companies which are slightly larger are getting good amount of support in terms of funds, and they are able to disburse and are growing and which is what is translating and Muthoot is at the outlier. We have had a very good quarter, quarter 1. We did around INR2,644 crores of disbursement, which is the ever highest disbursement in the Q1 as compared to the last quarter, it is around 49% improvement over the disbursement last financial year in the Q1 itself. If you look at from a perspective of the way the asset quality is improving, it's improving rapidly. We are at around 97.97%, almost 98% of overall collection on time. X-Bucket remains 99.9%. So the loans that we are lending are really performing well. Almost 65% of our book now represents disbursements, which have happened after April 2025. And in that book, the asset quality is very good, 30-plus is just 1.2% and 90-plus is much, much lower. The strategy that we have articulated in terms of strategic diversification that is playing Page 2 of 18 Muthoot Microfin Limited August 07, 2026 out as of Q1 end, 76% of our assets are income-generating asset JLG loans and around 24% is non-JLG loan. We have focused on individual loans. So that portfolio stands around INR3,200 crores, and that is really, really performing well. There is absolutely very minimal delinquency, 0.02% is the 30- plus, and there is no 60-plus as of now, no 90-plus. So that portfolio is really performing well. And our strategy is to focus on the creamy layer of the customers that we have. We have around 9 lakh customers in our portfolio, which are 700 score plus. And our effort is to focus on those customers and make sure that we become the number 1 priority lender for those customers. And with our technology, our app and our diversified products that are available to the customer, we'll be able to make us top-of-the-mind recall for that customer. And our focus is to create products which cater to their needs. We have an individual loan, which caters to their needs of growing business. We have gold loans, which is also there to cater to their emergency needs. We have loan against property, which is there to cater to their need of expansion and bigger kind of improvement in their business or in their livelihood, whatever they want to do. And we are soon introducing another product in this Board meeting, we have taken an approval for consumer durable loan, which is also needed for the improvement of living standards. I think from a company point of view, we are at a very sweet spot. Currently, we have a huge amount of liquidity. We have almost INR5,000 crores of sanction in our hand, and this is without counting the credit guarantee scheme of INR1,000 crores that is available to us. At the same time, our cost of fund is coming down. In the quarter, we have reduced our cost of fund from 10.27% to 10.13%, 14 basis point reduction has already happened in the Q1 itself. And this is before the benefit of the rating upgrade. We had a rating upgrade during the quarter. We are now AA- CRISIL rating. And the benefit of that rating will come in the coming quarters, so our cost of fund is likely to reduce. Even the benefit of credit guarantee scheme, we have not yet availed. We have just taken INR200 crores. Balance INR800 crores is still available for us to draw down. So I think from a cost of fund point of view, we are at a very sweet spot. The cost of fund is reducing for us and incremental borrowing cost is around 9.8%, which was already at 9.9%. We feel that in the financial year, we should be able to come into single digits in terms of our cost of fund and availability of fund is already there. The asset quality is improving very rapidly. What we are seeing, the ground, the collection is improving very much. Our overdue collection for the quarter was around INR53 crores, which is almost 27% higher than what was the overdue collection in quarter 1 last year, though it has a lot of scope even further because in March, we had done INR70 crores of th [Showing first 8,000 characters — download PDF for full document]