Any current/future new fundraising through debt or equity?

The company has successfully raised funds through Commercial Papers (CPs) and Non-Convertible Debentures (NCDs) during the quarter. New funding partners added include Morgan Stanley, Wint Wealth, and Barclays. Existing partners such as AK Capital, Northern Arc, and UGT continue to support, including providing new term sheets. The company has secured new bank sanctions, specifically from Indian Overseas Bank (IOB) and two private sector banks; highest exposure among private banks is with IDFC First and among PSUs with Punjab National Bank (PNB). No mention of imminent equity fundraising or plan

Any current/future capex/capital investment/strategic investment?

No explicit mention of current or future capex or strategic capital investments was found on page 17 or neighboring pages in the transcript. The focus is primarily on operational improvements, such as reducing co-lending book, improving collections, and diversifying loan portfolio into used commercial vehicles and used cars. Significant investment has already been made in setting up teams and IT systems for newer business segments (used car and commercial vehicles), with break-even expected around October-November 2025. Company is strengthening collection processes by hiring regional leadershi

Future growth expectations in sales/revenue/volumes?

Muthoot Capital aims to grow into a INR10,000 crore company by 2028, signaling strong long-term growth ambitions (Page 15). The company is focusing on pan-India expansion beyond its traditional stronghold of Kerala, despite operational challenges, to capture larger market opportunities (Page 15-16). Growth in the 2-wheeler segment continues but at a moderated pace; focus is shifting towards expanding used commercial vehicle and used car segments, targeting about 30% of portfolio contribution by year-end (Pages 11-12). Q1 FY26 saw a 49-50% year-on-year AUM growth, driven largely by 2-whee

Future growth expectations in earnings/operating earnings/profits/EPS?

Muthoot Capital aims to become a INR10,000 crore company by 2028, indicating strong growth ambitions beyond their core 2-wheeler business. Growth will be driven by increasing contributions from the used car and commercial vehicle (CV) segments, expected to form about 30% of the portfolio by year-end. The new segments (used car and CV) are expected to break even by October-November 2025, improving overall profitability. Despite short-term pressure due to elevated impairment costs and slippages, the company expects credit costs to normalize around 1.65% to 1.75%. They plan to maintain as

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Muthoot Capital Services LtdQ2 FY25Finance

Muthoot Capital Services Ltd Q2 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹211P/E: 27.4Market Cap: ₹336 CrSector: Finance

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Muthoot Capital aims to grow into a INR10,000 crore company by 2028, signaling strong long-term growth ambitions (Page 15).
→The company is focusing on pan-India expansion beyond its traditional stronghold of Kerala, despite operational challenges, to capture larger market opportunities (Page 15-16).
→Growth in the 2-wheeler segment continues but at a moderated pace; focus is shifting towards expanding used commercial vehicle and used car segments, targeting about 30% of portfolio contribution by year-end (Pages 11-12).
→Q1 FY26 saw a 49-50% year-on-year AUM growth, driven largely by 2-wheelers (48% growth) and newly established CV and used car businesses (Page 6-7).
→Seasonal growth is expected with the festive season starting in Kerala in September, followed by the rest of North India (Page 6).
→The company expects breakeven for new segments (used car, CV) by October-November 2025, supporting overall portfolio diversification and incremental revenue (Page 12).

Margin guidance

Category 3

→Muthoot Capital aims to become a INR10,000 crore company by 2028, indicating strong growth ambitions beyond their core 2-wheeler business.
→Growth will be driven by increasing contributions from the used car and commercial vehicle (CV) segments, expected to form about 30% of the portfolio by year-end.
→The new segments (used car and CV) are expected to break even by October-November 2025, improving overall profitability.
→Despite short-term pressure due to elevated impairment costs and slippages, the company expects credit costs to normalize around 1.65% to 1.75%.
→They plan to maintain asset quality, targeting GNPA around 4.5%-5% overall and 5.5% specifically for 2-wheelers by year-end.
→Collection efficiencies are improving post Q1, and seasonal factors (festive season from September) are expected to boost recoveries and earnings.
→No plans to sell NPA portfolios to ARCs, indicating confidence in internal recovery efforts.

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Fundraise plans

→The company has successfully raised funds through Commercial Papers (CPs) and Non-Convertible Debentures (NCDs) during the quarter.
→New funding partners added include Morgan Stanley, Wint Wealth, and Barclays.
→Existing partners such as AK Capital, Northern Arc, and UGT continue to support, including providing new term sheets.
→The company has secured new bank sanctions, specifically from Indian Overseas Bank (IOB) and two private sector banks; highest exposure among private banks is with IDFC First and among PSUs with Punjab National Bank (PNB).
→No mention of imminent equity fundraising or plans to sell asset portfolios to Asset Reconstruction Companies (ARCs).
→Overall cost of borrowing has reduced, indicating ongoing effective debt management.
→The company maintains a stable credit rating of A+ across various borrowing instruments.

Order book

Yes

The transcript does not explicitly mention current or expected order book or pending orders for Muthoot Capital Services Limited. However, relevant pointers on business growth and loan book include: - The company’s overall AUM grew by approximately 49% year-on-year to INR 3,239 crores as of Q1 FY '26. - The loan book more than doubled over the last year, from around INR 1,000 crores to INR 2,100 crores in MCSL’s standalone portfolio. - New segments like used commercial vehicles and used cars have scaled and crossed INR 100 crores AUM each with negligible stress. - Co-lending book has shrunk by almost 20% in Q1 FY '26 as part of risk management. - Growth focus is on 2-wheeler loans along with expanding usage of commercial vehicle and used car portfolios aiming for about 30% contribution by year-end. - Disbursements in Q1 increased with retail business at INR 618.48 crores versus INR 497 crores previous year Q1. No specific data on order book or pending orders is provided in the transcript.

Capex plans

Yes

→No explicit mention of current or future capex or strategic capital investments was found on page 17 or neighboring pages in the transcript.
→The focus is primarily on operational improvements, such as reducing co-lending book, improving collections, and diversifying loan portfolio into used commercial vehicles and used cars.
→Significant investment has already been made in setting up teams and IT systems for newer business segments (used car and commercial vehicles), with break-even expected around October-November 2025.
→Company is strengthening collection processes by hiring regional leadership and improving underwriting models through partnerships (e.g., with CIBIL for CreditVision algorithms).
→No mention of large-scale capital expenditures or strategic investments beyond these operational enhancements and product diversification initiatives.

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