Muthoot Finance Limited (NSE: MUTHOOTFIN) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
George Alexander Muthoot — Managing Director
Oommen K Mammen — Chief Financial Officer
Analysts:
Unidentified Participant
Shweta Daptardar — Analyst
Raghav Garg — Analyst
Mona Khetan — Analyst
Shreepal Doshi — Analyst
Kushagra Goel — Analyst
Mayank Agarwal — Analyst
Kushan Parikh — Analyst
Harshit Toshniwal — Analyst
Abhijit Tibrewal — Analyst
Rajiv Mehta — Analyst
Rushabh Doshi — Analyst
Presentation:
operator
Ladies and gentlemen. Good day and welcome to The Muthut Finance Q1FY26 earnings conference call hosted by Elara Securities India Private. As a reminder, all participant lines will be in the 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 call please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Ms. Shweta Dabtardar from Ilara Securities India Private Limited. Thank you. And over to you ma’m.
Shweta Daptardar — Analyst
Thank you Anushka. Good evening everyone. On behalf of Ilara securities we welcome you all to Q1FY26 earnings conference call of Muthoot Finance from the esteemed management we have with us today. Mr. George Alexander Muthoot Managing Director Mr. Alexander George, Full Time Director. Mr. George M. Alexander, Full Time Director. Mr. GEORGE M. GEORGE, Full Time Director. Mr. G.EORGE M. Jacob, Full Time Director. Mr. Yapin Alexander Executive Director. Mr. K.R. bijimon, Executive Director. Mr. Uman K. Maimin, Chief Financial Officer. We express our gratitude towards the esteemed management of Muthoot Finance to provide us the opportunity today to host this conference call.
Without further ado I now hand over the call to Mr. George Alexander Muthoot Managing Director for his opening remarks post which we can open the floor for Q and A. Thank you. And over to you sir.
George Alexander Muthoot — Managing Director
Thank you. Good evening to all. This is George Alexander Muthut Managing Director of Mukt Finance. Today we had our company’s board meeting for the Q1 of 2526. The meeting just got over and I am here to present the report for the Q1 performance of Muthoot Finance. We had an impressive start of the year and our standalone loan assets under management has reached a record of 1,20,031 crores driven by a robust 40% year on year growth in gold alone of 2 to 32,272 crores for the full year and a 10% quarter on quarter increase of 10,238 crores.
This is a testament to our three pronged strategy to focus on disbursements, operational efficiency and maintaining healthy margins. As a result, our standalone profit after tax for this quarter grew by 90% to reach 2046 crores. These results reaffirm our leadership in the Gold Loan segment supported by Pan India Branch Network, strong brand equity and deeper customer engagement. We are encouraged by the growing acceptance of Gold Loan as a reliable, accessible and inclusive form of credit. Looking ahead, we are accelerating our efforts to digitally enable our Gold loan offerings, making credit taxes faster, more seamless and more inclusive.
Our technology investments are already enhancing our customer experience, reducing turnaround times and strengthening operational efficiency. The recent RBI guidelines on Gold loans will bring greater transparency and further streamline the lending process while the recent interest rate cuts create a favorable credit environment. With these supportive tailwinds and a continued focus on innovation and services, we are well positioned to sustain strong growth through financial year 25, 26 and beyond. This year we have seen we have crossed the market capitalization of 1 trillion. We opened 22 branches and won many rewards and accolades. The subsidiaries are also doing well.
The Bellstar Microfinance has opened 10 gold loan branches in Q1 to diversify the loan portfolio. It has maintained a stage 3 loan asset at 4.4% which is consistent with the industry peers and Muthoot Home Finance. The loan aum stands at 3,096 crores versus 2,100 crores in the last year. Same quarter a 41% year on year growth Muthoot Money the loan Aum at 5000 crores in Q1 versus 1657 in Q1. A growth of 202% year on year. Continued decline in NPA through physical collections witnessed consistently throughout the year. GNPA has increased to 0.96 in Q1 that is for Muthoot Money.
The branch network also increased to 997 during this quarter. Overall this year has been quite good for Muthut and I think all the other details are there in the in the slides and presentations we have given. I will I will halt now. I will stop now and probably wait for your clarifications and questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star. And 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Raghav from Ambit Capital. Please proceed.
Raghav Garg
Good evening and thanks for the opportunity. I have a few questions. One is this quarter the yields have expanded by 100 basis points sequentially. And I also noticed that there have been some significant NPA recoveries of about 550 crores on a net basis. So my question is, was there any booking of income in the interest income line related to this NPA recovery? If yes, how much was it?
George Alexander Muthoot
That’s all. That’s your question. Any more questions?
Raghav Garg
Yeah. So the other question I had was the sequential addition in customers. I noticed that previously we were running or growing at about 2% in Q4 and Q3 on a quarter on quarter basis. This time it has come down to 1.4%. So what will be your guidance going ahead? Yeah, those were my only two questions. Thank you.
George Alexander Muthoot
The second question I did not understand. What is this 2% and 1.4%.
Raghav Garg
So if you look at your number of active customers in Q3 and Q4.
George Alexander Muthoot
Thank you. Thank you. So regarding the yield, the yield is 19.56 and usually our yield is 18.5. This year the this quarter the yield has been better. As you exactly said there was. There has been a 700 crore NPA reduction. And the interest accrued on that which has come into the P and l is around 300 crores. Number two, we had given some of our loans, sold some of our loans to the ARC about a year back. And now today all the principal has been received in the last quarters. So this quarter we received 100 crores from the ARC which is fully towards the interest.
So 300 plus 100400 crores is the extra interest we received this year. And that should account for the higher yield of 100 basis points more. And about the number of customers.
Oommen K Mammen
So sequentially I think the outstanding number of customers has increased by about 1 percentage. We’ve been repeatedly saying that you should look at the new customer additions which is actually the net outstanding number of new customers added is about 4.2.
operator
Hello. Mr. Raghav,
Raghav Garg
I’m still here. I could not listen to the management in the last 10 seconds.
operator
Sorry to interrupt. The line for the management has been disconnected. Please wait till I connect the management back. Ladies and gentlemen, the line for the Management has been reconnected. Thank you, Raghav. You may proceed.
Raghav Garg
Yeah, I think the management was seeing something.
George Alexander Muthoot
Yeah. You heard about the interest, yield etc.
George Alexander Muthoot
Yes. Yes, I heard the 400 crore.
Raghav Garg
Yeah. Yeah.
George Alexander Muthoot
So the next. The next point was about the customer addition. The new customer addition in last quarter was last quarter, not this quarter. Last quarter was 4.1 lakhs and this quarter just 4.4 lakhs. 4.24 lakhs. 4.24 lakhls. So there is increase in the number of new customer additions. What you said is only the net growth in the customers. So new customers are coming and all customers are going out. So we are better off in the new customer edition. That’s what I wanted to.
Raghav Garg
Just one more follow up question. If I remove this 400 crores of exceptional income. Right. And when I also look at. So is there any comparative pressure because this. This after removal 400 crores the yields are somewhere around 18.15. 18.2% which is lower the run rate that you had.
George Alexander Muthoot
400 crores. 400 crores is just an approximate number.
Oommen K Mammen
Maybe 300 to around. Roughly around 300. 350 crores.
George Alexander Muthoot
Yeah.
Raghav Garg
Understood. Okay. And generally what is your sense in terms of competition? One of the other guys in Golden State said that they want to reduce rates and you know, be more. Are you seeing any such comparative activity on the ground?
George Alexander Muthoot
Sir, the gold loan business is the flavour of the market. So all competitions are trying to come there. So people come with different strategies. Muthut has been a long player in this, a very old player in this. And we have our own strategies. And I don’t think we need to respond to small strategy changes by others. We will go our way as we are. We have been in the market for such a long time. I don’t think these things matter to us.
Raghav Garg
Understood. That was all from my side and thank you and best of luck. Thank you.
operator
Thank you. We take the next question from the line of Mona Khetan from Daulat Capital. You may proceed.
Mona Khetan
Hi sir. Good evening and congratulations on a strong quarter.
operator
Hello. Your voice is breaking. Could you please fix that?
Mona Khetan
Any better?
operator
Much better.
Mona Khetan
Yeah. So firstly just confirming back on the yield so you know, extra interest that you earned this quarter. Is it fair to assume that your yields would have been similar in the same range as what you’ve been reporting?
George Alexander Muthoot
Yeah. Yeah. Correct. Yes. It would have been the same as what we were continuing in the last quarters. Yes, you’re right.
Mona Khetan
Got it. And secondly, just touching on the final guidelines on Gold loans, I understand they’re far more relaxed versus the dark circular. But just to take cues as to what changes are you anticipating in terms of LTV once it comes into effect?
George Alexander Muthoot
I think if you want to know my view on the new regulation, I feel it is quite gold loan business friendly. The new revised guidelines are quite gold loan business friendly. It actually. Can you hear?
Mona Khetan
Yeah,
George Alexander Muthoot
It gives us more flexibility and actually more product offering to the customer in the new regulations and up to 2.5 lakhs the LTV has been revised from 75 to 85%. So any company who wants to give Even up to 85% there is flexibility. That is what I said. It gives more flexibility and we can give more products to the customer also.
And for your information 85% of our customers are below 2.5 lakhs.
Mona Khetan
Okay so because this. So just to follow ups here, will it lead to movement towards higher ticket sizes? Because in the large ticket sizes there is no, not much, you know ltv especially if it’s given for the income generating purposes. So does it lead to you know, increase in ticket sizes across lenders given the guideline and also you know for this sub 2 and a half lakh segments does the effective LTV which you will say alluding to 55% earlier, does the effective LTV including the interest component, does that come down to say 65% versus the 75% which we had, the cap we had earlier pre guidelines or. What we are
George Alexander Muthoot
, I’m not sure what is this 55% and 65% etc today maximum LTV which can be given is 75%. What I said is up to 2.5 lakhs there is flexibility to give up to 85% LTV. That’s what I meant. And about the bigger ticket customers. Yes, bigger ticket customers are there now also. And not that everybody will take the 75 or 85, they will take only what they want. Sometimes it may be 60, sometimes it is 70, sometimes it will be 75.
Mona Khetan
And will it also lead to like increased product offerings, like more of pure monthly products? Given that you know it may not have the inclusion of interest component.
George Alexander Muthoot
As I said earlier, it gives us flexibility and we have, we can offer more products. Anyway this is all kicking in only by next March, right?
Mona Khetan
Right. And just one last data keeping question. What would be the share of your loans above 5 lakhs? Aeon makes above 5 lakhs.
Oommen K Mammen
So. You mean the.
Mona Khetan
Yeah. Ticket size loan amount AUM makes above 5 lakh tickets.
Oommen K Mammen
About 3 lakhs. I am having that is about 40%.
Mona Khetan
Okay. If you could during the call, if you could share at some point above 5 lakh also that’ll be very helpful.
Oommen K Mammen
I don’t have that information
George Alexander Muthoot
That is not available here today.
Mona Khetan
Okay. Okay, no problem. Thanks so much and all the best.
operator
Thank you. Before we proceed with the next question, a reminder to the participants. In order to ask a question, you may press star in one on your touchstone telephone. We take the next question from the line of Sripal Doshi from Equiris. Please proceed.
Shreepal Doshi
Hi sir. Thank you for giving me the opportunity. My question was on ticket size. So incrementally since the benefit of the newer regulation is for less than 2.5 lakh ticket size, would we as an organization also focus more in the smaller ticket size versus earlier wherein we were active across all ticket sizes. Will that be a thought process?
George Alexander Muthoot
No, we have not thought about it. Because anyway we feel that we cater to all the type of customers. The small customer, the big customer, everybody. Because through our branches and to our, what should I say, our legacy of operations, we have all these customers. So we have not thought about giving only to small customers or only to big customers. We cater to all and we have definitely a mix of all these customers going forward. We haven’t thought about that, sir.
Shreepal Doshi
Got it sir. So the second question was on the rate side. So I mean since we are in a rate cut cycle already, will we pass on this benefit on the cost of fund side to the end customer? And also because you know, as you also alluded that the competition has increased. So in all are we looking to look at have some rate cut going ahead?
George Alexander Muthoot
Yeah, it is always. We try to always maintain our spread and our yield spread and our. So our spread is about 9.5%. We try to maintain that always. And if going forward our cost of fund is coming, cost of borrowing is coming down, we certainly will pass it on to our customers. Because that we have been doing that all the way. So if there is a rate cut or cost of borrowing is coming down, we will pass it on to our customers.
Shreepal Doshi
Got it? So one last question was on the NPA front which has benefited us on the interest income side as well. So what really helped us to, you know, bring down this NPA by almost 700 crores on a Q1Q basis. Like what efforts or what measures had we taken that led to such a. Such a sharp reduction?
George Alexander Muthoot
It is not that we engaged people to go and collect our money etc. It is people coming forward, they wanted their gold Back they came forward, we gave them time to clear the load. So what. What was our NPA was just because we had given these customers time to redeem their gold instead of auctioning it. So in quick time sometime they came back, they took back their gold. So because of that they were able to save the gold. That is what we see in this. It is not that you don’t don’t need to do any recovery methods etc.
Shreepal Doshi
Got it. Thank you so much for answering all my questions.
operator
Thank you. We take the next question from the line of Kushatra Jewel from clsa. Please proceed.
Kushagra Goel
Hi. Thank you for taking my question. Am I audible? Congratulations on a good set of numbers. Most of my questions are already answered. Just one question. So your OPEX was also better this quarter. So can you give us some guidance on this how you are looking at it going forward?
George Alexander Muthoot
See opex. Yeah. It will be better because the AUM is going up. The per branch business is also going up. Per branch business which is much lower. Earlier today is more than 25 crore. So as the per branch business goes up proportionally a part of the OPEX also per will come down. Of course there is inflation and other things to consider. But if you. If any company wants to reduce the opex they have to increase the per branch business. So if this time the OPEX has come down, it is because we had a 10,000 crore growth in the AUM.
Kushagra Goel
Right? Okay. So any particular guidance on this?
George Alexander Muthoot
The OPEX here, it will be almost stable. Almost stable. In absolute terms. It will go up only by the rate of inflation. It will only go up by the rate of inflation.
Kushagra Goel
Thank you.
operator
Thank you. We take the next question from the line of Mayank from Trust Mutual Fund. Please proceed.
Mayank Agarwal
Hello. Am I audible?
George Alexander Muthoot
Yes. Yes.
Mayank Agarwal
Thanks for the opportunity. So you indicated that there were a. Good amount of repayments from the customers who were NPA or who were not able to repay. Can you give some color on the geographies where you are seeing the higher repayments? Any specific customer segment, ticket sizes or industry? Basically I’m trying to understand if the rural segment is picking up. They are saying. You are saying good industry. What I can. Sorry. The rural customer is picking up what is leading to the higher retainments?
George Alexander Muthoot
I don’t think we have any data on that. It is a general feeling only. We don’t have such a granular data.
Oommen K Mammen
Yeah. So we are too scattered across various geographies. And there is not much of a pattern which is emerging. In every geography there is an NPA and you can’t attribute any particular reason for that. And don’t give too much importance for this NPA going up or NPA coming reduction. What you need to focus. I should have mentioned this in the earlier response though. In gold loan business you categorize loans as NPA and you reverse the interest accrual on those loans. You make an ECL provisions. You know the important thing is that later it will come back no interest, the accrued income will come back and also the ECL provisions will get reversed.
That is the importance you need to attach to NPS in a gold loan book.
operator
Thank you. We take the next question from the line of Kushan Parek from Morgan Stanley. Please proceed.
Kushan Parikh
Thank you for taking my questions. Just had a few data keeping questions and a couple of queries as well. So just on the borrowing costs we saw 11 basis point QoQ benefit in 1Q. What would our incremental borrowing cost be now? And if you could also share the external benchmark link rate borrowings. Just trying to understand how much benefit we can get on the borrowing cost in coming quarters. And secondly also on the ARC sales we accrued about 100 crores interest in 1Q. Is there more benefit in terms of interest accrual in coming quarters that we expect? If you could quantify that.
Lastly just a few data keeping questions. If you could share the AUM by ticket size as you usually do on the call and also the auction numbers are 1, 2. Yeah.
Oommen K Mammen
Okay. Okay. Yeah so borrowing cost I think there’s as you said 11 bips decline. So most of our loans are linked to the mcls as and when the MCLR comes down of the banks it will come down and we are expecting that to happen in next three to six months. We don’t have anything linked to EBLR so far we have not got that privilege. But on the NCD market we have been able to bring down our rates. Recently we have done two and a half year at around 7,85% so borrowing. Cost is coming down
George Alexander Muthoot
And as a practice when the borrowing cost really comes down we always maintain our spread of 9.5% and if there is the borrowing cost is coming down considerably we pass it on to our customers. The second part is about the ARC. This quarter we have received about 100 crores in the from the ARC. Probably another 100, 150 crores is yet to receive in the coming quarters. So what the principle has already been fully been revealed, released, realized. So another 100250 quarter crores may come in the coming Quarters. Was there one more question?
Oommen K Mammen
Ticket wise about 3 lakhs. As I said it is 40%. Between 1 lakh to 3 lakh it is 34%. And no less than 1 lakh it is 26%.
Kushan Parikh
Understood. Sir, just the last question on the.
Oommen K Mammen
Auction for the quarter auctions are only around 1314 crores.
George Alexander Muthoot
It’s about 13 crores only.
Kushan Parikh
Thank you. Those are my questions. Thank you.
operator
Thank you. We take the next question from the line of Harshit from Premji. Please proceed.
Harshit Toshniwal
Hello, sir. Hi. Am I audible?
George Alexander Muthoot
Oh yes.
Harshit Toshniwal
Yes. Okay. Firstly, congratulations sir for an exceptional set. Just one question on the NPA side. If you can help that the breakup between the gold loan and the non gold loan piece within the standalone business. I think last year you mentioned it was around 300 crore. Was roughly the stage 3 for the non gold loan business. If you can help with that number. And second sir, I think that piece is also growing at a pretty fast. It’s now 5.7%. Any. Any view on what is the mix you want to keep on the non gold loan piece over there? And many asset quality trends you are seeing over there.
George Alexander Muthoot
Our non gold loan business is about 13 to 14%. Now I think we would like to keep it. Hello.
Harshit Toshniwal
Yes, sir.
George Alexander Muthoot
So we would like to keep it 15 to 20% going forward also. So. But our first preference, first priority will be the gold loan. So we try to do the gold loan. If you take out the micro finance, our known gold loan portfolio is only about 5%.
Harshit Toshniwal
Right. Got it. And sir, on that on the standalone book itself the what would be the stage three in the non gold loan book? You mentioned this number around 300 crore last year.
Oommen K Mammen
I think non gold. I think the NPS have come down by about 30 crores. So you know that also has helped in reversing the ECL production by about 30 crores. Because in non gold we make 100% provision.
Harshit Toshniwal
Okay. Over there we have also seen some recovery. Got it. Got it. Okay, sir. This is good. Thank you.
operator
Before we proceed with the next question, ladies and gentlemen. In order to ensure that the management is able to address questions from all the participants. Please limit your questions to one per participant. We take the next question from the line of Abhijit from Modilal Oswal. Please proceed.
Abhijit Tibrewal
Yeah. Thank you, sir. First one is a clarification. Earlier during the call you suggested that 100 crores recoveries from ARC and about 300 crores interest income write backs from NPA recoveries. And then later during the call cumulatively this could be 3350 crores for the benefit of all of us. If you could just give us the exact numbers how much was the interest income right back from NPA recoveries? Instead of we all making our own assumptions that would be very useful. So if you could just address that before I can start asking my other questions.
Oommen K Mammen
Abhijit. No, we don’t exactly track the collections from NP. But roughly if you collect 700 crores maybe 35 to 40% is the recovery on those loans. So that is why we have given around 300 crores. Arc amount is exact amount around 100 crores.
Abhijit Tibrewal
Okay. So next I wanted to understand. That if I look at the NPA recoveries almost 60060010 crores on a net basis they have declined while the gold loan options were just about 13 crores. What you shared. So when we say recoveries this is more in the nature of customers coming back and repaying us, right? In a quarter almost 600 crores worth of loans their customers have come back and repaid when they were nps. Is this understanding correct?
George Alexander Muthoot
You’re correct. But again just don’t consider this NPA as a default customer etc as a willful default or something like that. A customer who has not been able to pay during the the loan period. We just gave him more time so that he is given opportunity to take it back and he used that opportunity. Let us not see more than that. This is somebody whom we are to go and collect it or he has not because his gold is here. He will come and collect it. He’ll take back the gold from us. That is why he has come.
So it is not that we need to go and collect it etc. We gave him some time and he utilized that time to maybe take it back. That’s it.
Abhijit Tibrewal
Got it. And so lastly in terms of two subparts to this question one is, I mean while the EVM growth was very strong, I mean tonnage has not really gone up too much. I mean maybe a 0.5% QQ growth in tonnage. Is it primarily because of the gold price increase that we saw during the first quarter? Because your LTVs have also largely been in that same ballpark. Not too much of a increase in the lgb. That is one. And the other thing is now in terms of Muthoot Manisa you had shared in your opening remarks 997 branches.
So will we be applying to the RBI for opening new branches? Because it is just three branches short of thousand branches where we need RBI approval. And secondly sir, 5000 crores of Aum in muthal money. Is it all gold loans or do we have other products as well? The old products that we used to do in Muthoot money earlier.
George Alexander Muthoot
We’ll start with muthut money. The last question. Muthut money. We had a vehicle portfolio of about 600 crores. Now it has a rundown it’s about 150. Less than 150 crores only. So if the 5000 is there the balance is all gold alone. So about the branches. We just opened the branches. We are just waiting for the branches to maybe mature. And once it matures and we feel that we need more branches we will go to the rbi. The other question was about. Ah yeah yeah. This is a very interesting subject. I think people need to realize something also on this.
See our loans are actually only very short term. 3, 3, 3 months, 4 months etc. A person who had given 100 grams of gold and taken may be exact 5 lakhs of money 3 months back. Next time when he or his friend comes for 5 lakhs he need not go 100 crores because the LTV has gone up. He needs to go only 90 grams. So the same 5. I can’t ask the customer to give me 100 grams because every day the LTV is going up so he takes advantage. So because the new customers are coming they come at a low lower tonnage.
That’s the difference. You can’t.
Oommen K Mammen
They need to tender a lower amount of gold than what was six months back. So you can’t expect tonnage at all points of time to increase. But you need to see now what is the average LTP on the book. Even now the average LT on the book is 63%.
George Alexander Muthoot
That’s what you also said Going by.
Oommen K Mammen
The. By what you mentioned. No it should always be at 75% because that is the maximum LTV. No. Which itself shows that no not every customer is going to take the full LTV but new customers because we are giving the 75% LTV they will tender only a lower quantity of gold.
George Alexander Muthoot
That is. That is why because if the gold price is going up the LTV will definitely the tonnage will come down. If the gold price is coming down and people need the same amount of money they’ll bring more gold or tonnage will go up.
Abhijit Tibrewal
Got it? So this is well understood. This is well understood.
George Alexander Muthoot
One more, one more point. All three answers.
Abhijit Tibrewal
No sir, all already been answered. Just a quick clarification on what you answered. So right now we are doing gold loans from the standalone entity which is Mutut Finance and Muthut Money. And going forward there are plans to start Gold loans in Bellstar as well.
Oommen K Mammen
We have already started.
George Alexander Muthoot
You already started, sir, I think how many branches we have for gold?
Abhijit Tibrewal
10. Around 10.
George Alexander Muthoot
Is there now? As of date it is 15, 1, 5.
Mona Khetan
15. And the plans to add 10 more?
George Alexander Muthoot
No, no, no, all last quarter. 10 as of date 50 and 50 more there. 50 more they’re planning to add immediately.
Mona Khetan
Right, this is useful. Thank you so much and I wish you and your team the very best.
operator
Thank you. We take the next question from the line of Rajiv Mehta from yes, securities, please proceed.
Rajiv Mehta
Yeah, hi, good evening. Most of my questions are answered but just two things sir, if the standalone company, the employee cost is moving in line with the AUM growth for the last three quarters so can we expect some operating leverage or are most of the employee cost related to the value growth? And hence, you know, as a proportion of overall aum it keeps on moving in the same line.
George Alexander Muthoot
Employee cost, there is always an increment, etc. To employees implement bonus incentives, etc. Of course Muthut pays handsome incentives to the, to the staff also but employee cost also definitely will go up because there is always a yearly increment, yearly bonus, yearly incentives. So I think it is moving in tandem only.
Rajiv Mehta
Yeah, it was just an observation because last three quarters it’s been growing in line with the AUM and the AUM has grown really well. So the incentives of the schemes that we run for the employees, is it linked to value growth itself or is it more linked to the number of customers volume numbers?
George Alexander Muthoot
I don’t think we don’t look into that granular reasons for the increase in employee cost etc. We, we have to pay the employees reasonably well otherwise they’ll run away. So if you pay them well, they’ll do a good job. That’s what we try to do. We haven’t looked at the correlation between the total AUM and the employee cost. Anyway, now that you have said it, we look at look for it in the next quarters.
Rajiv Mehta
And sir, how should we look at this customer acquisition run rate? Because see I’m seeing it’s been pretty healthy but last three quarters it’s been pretty steady only. And see on one side you are seeing that competition is coming but we’re not very perturbed by it. And on the other side the gold demand is also increasing. So if the gold demand is increasing and if the competition is not impacting us, ideally we should see this customer acquisition run rate, customer reactivation run rate, you know, go up to the next level. Do we see that happening?
George Alexander Muthoot
So I think that is what we tell our branch people also to have more customers anyway we always tell them we get some but sometimes we are not able to get all the customers anyway. We are reasonably happy with the run rate and the growth rate etc.
Rajiv Mehta
Yeah. Just last thing, how do you expect the provisioning cycle to play out in bellstaff and can you share some collection trends?
Oommen K Mammen
Collections are improving actually
Unidentified Speaker
We have better collection. I’m sure that the Q3 they would be able to come back to the maybe starting some profit. So collections are improving actually and especially the advances given. From November 24th onwards we have a. Very good collection percentage,
Oommen K Mammen
External collection percentage on the new loans which are in the last six months. 99.8. 99.8.
Rajiv Mehta
Yeah. Thanks so much investors.
operator
Thank you. We take the next question from the line of Rushab Doshi from Nirmiti Investment Advisors llp. Please proceed.
Rushabh Doshi
Yeah, hi. Am I audible?
George Alexander Muthoot
Yes sir. Yes sir.
Rushabh Doshi
Congrats on a great set of numbers. So like since you are growing very fast, another effect is that we are consuming a lot of capital. So I see our crar close to around 22%. So when would we go for a fundraise? Because I believe it’s been 10 years since we’ve done our last fundraise. And also like would you be preferring a rights issue or you would prefer a QIP or something like that?
Oommen K Mammen
I think we are very comfortable the capital even with the growth plant, you know, we’ll be very comfortable even after declaring dividends.
Rushabh Doshi
Okay. And my second question was that like in the annual report I noticed that we’ve been adding some debt mutual funds. So like was this kind of a one off opportunity or we are going to build on that?
Oommen K Mammen
What is that? Debt mutual fund.
Rushabh Doshi
We have around 1800 crores of debt mutual fund. So like was this kind of one off investment because I guess there was a good yield opportunity at that time.
Oommen K Mammen
They’re all no temporary parking of funds. See our core business is lending, lending. So so as and when we require the month we will redeem all those investments and you utilized for that’s only.
George Alexander Muthoot
Temporary parking of excess fund, sir.
Rushabh Doshi
Okay. Yeah. That’s all from.
operator
Thank you. We take the next question from the line of Abhijit from Motilal Oswal. Please proceed.
Abhijit Tibrewal
Yeah, thanks for the follow up. So this just one, one data point I needed. What is the split of gold loans where the ticket size is less than 50,000. And also earlier during the call I remember MD sir saying that the AUM split misses the number of customers where the ticket size is less than two and a half lakhs is 85%. So while you have already shared the split of gold loans basis the AUM by value if you could also share some cut basis the number of customers based on the ticket size of Go.
Oommen K Mammen
Based on Number of customers am number of customers. 85% of the customers is less than below 2 and a half lakhs. And about 15% is about 2 and a half lakhs.
George Alexander Muthoot
He wanted to know 50,000. You want to know 50,000. My God. Such granular numbers. Today 50,000 is not worth much. Give us a minute. Let’s see if we have it.
Oommen K Mammen
Loans less than 50,000. It’s probably about 11 odd percent.
George Alexander Muthoot
11%.
Abhijit Tibrewal
Great. This is all from my side. Thank you so much.
operator
Thank you. We take the next question from the line of Sripal Doshi from equidistance. Please proceed.
Shreepal Doshi
Hi sir. Thank you for giving me an opportunity. Once again the question was on this delinquent customer. So basically I think closer to 60, 65, 70,000 accounts would have repaid or would have turned. Basically repaid the interest component from being part of the NPA pool because 700 crore has been reversed. Right? So just wanted to understand like once they have repaid the entire interest are they further eligible for fresh loans? As per our policy,
George Alexander Muthoot
They have not renewed. They have taken back the vote. They have lost the world and taken back.
Shreepal Doshi
Sorry that I couldn’t understand that the.
George Alexander Muthoot
Customers who out of the npa it’s not that they have paid the interest, collected the interest principle and returned back the gold to them.
Shreepal Doshi
Okay, so we. Okay, they also collected the gold.
George Alexander Muthoot
Yeah, yeah, yeah, yeah. We got the principal interest they collected. It’s mainly to collect the gold that they’re taking back the gold. Sir.
Shreepal Doshi
All right, all right, Got it. Thank you for answering my question.
operator
Thank you. Ladies and gentlemen. Due to time constraints we take that as the last question and would like to hand the conference over to the management for closing comments.
George Alexander Muthoot
Thank you. Thank you. We value all the suggestions, comments and questions from our valued investors. We from Muthut, we are happy that you all participated in this. And we from our side assure you that the company and the management will do all our best to see that the interest of all our stakeholders are protected. Whether it is the investors, whether it is the banks who have lend us money, whether our customers, whether our employees and we will put in all our efforts to see better and better results in the next quarters. So thank you and wishing you all a good Independence Day.
Thank you. Jai Hind.
operator
Thank you. On behalf of Ilida Securities India Private Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your.