💰 Financial Performance

Revenue Growth by Segment

Total income grew 44.25% YoY to INR 302.91 Cr in H1 FY26 from INR 209.98 Cr in H1 FY25. The growth is primarily driven by the two-wheeler loan segment, which saw AUM grow 50% in FY25, exiting at INR 3,000 Cr.

Geographic Revenue Split

The company operates across 388 districts in 23 states. While specific % splits are not disclosed, Southern states represent the core market with significant penetration, while strategies are in place to expand robustly across the rest of India.

Profitability Margins

Yield on assets improved to 20.32% in Q2 FY26 from 19.64% in Q1 FY26. However, the company reported a net loss of INR 1.8 Cr for H1 FY26, compared to a PAT of INR 45.7 Cr in FY25, due to high impairment and finance costs.

EBITDA Margin

Net Interest Income (NII) grew 3% in Q2 FY26. The company targets a 4% Return on Assets (ROA) by the time it reaches an AUM of INR 10,000 Cr, up from a current RoMA of -0.1% in H1 FY26.

Capital Expenditure

Not disclosed as a specific INR figure for physical assets; however, the company is scaling its total managed assets to INR 3,869.6 Cr as of September 2025 to support its growth targets.

Credit Rating & Borrowing

Long-term rating is [ICRA]A+ (Stable) and short-term rating is CRISIL A1+. Recent Commercial Paper (CP) of INR 15 Cr was issued at a discount rate of 8.26% for an 88-day tenure.

⚙️ Operational Drivers

Raw Materials

Debt Capital (Banks, NCDs, Commercial Paper) representing 51.6% of total income in finance costs (INR 156.48 Cr in H1 FY26).

Import Sources

Not applicable for financial services as the primary input is domestic capital sourced from Indian financial markets.

Key Suppliers

York Transport Equipment (India) Private Limited and Essvee Investments Private Limited (allottees of recent Commercial Paper).

Capacity Expansion

Current AUM of INR 3,284 Cr as of September 2025, with a strategic objective to expand to INR 10,000 Cr AUM by 2028.

Raw Material Costs

Finance costs reached INR 156.48 Cr in H1 FY26, representing 51.6% of total income, an increase from INR 94.42 Cr in H1 FY25 due to higher borrowing to fund AUM growth.

Manufacturing Efficiency

Credit underwriting efficiency is reflected in the reduction of impairment from 3.44% in Q1 FY26 to 2.05% in Q2 FY26.

Logistics & Distribution

Not applicable for financial services.

📈 Strategic Growth

Expected Growth Rate

35-45%

Growth Strategy

The company plans to achieve its CAGR target by diversifying into 'everything on wheels' including four-wheelers and CVs, expanding its national footprint beyond the south, and leveraging Muthoot Fincorp's 3,600+ branches to minimize customer acquisition costs.

Products & Services

Two-wheeler loans, used car loans, three-wheeler loans, commercial vehicle (CV) loans, and business loans to corporates (largely NBFCs).

Brand Portfolio

Muthoot Blue, Muthoot Pappachan Group.

New Products/Services

Expansion into four-wheeler financing (led by a new National Head) and used car loans, expected to contribute significantly to the target INR 10,000 Cr AUM by 2028.

Market Expansion

Expansion across 23 states and 388 districts with a focus on robust national presence beyond the current southern stronghold.

Strategic Alliances

Operational synergy with flagship group company Muthoot Fincorp Limited for infrastructure, dealership points, and lead generation.

🌍 External Factors

Industry Trends

The two-wheeler segment is poised for growth despite a low-performance year; NBFCs are evolving into single-stop financiers with an accommodative RBI stance, positioning the company to capture market share through diversified 'on wheels' products.

Competitive Landscape

Competes with other NBFCs and banks in the vehicle financing space; competitive advantage is derived from the Muthoot Pappachan Group's existing customer relationships and branch network.

Competitive Moat

The company benefits from the 'Muthoot Blue' brand and the extensive infrastructure of Muthoot Fincorp, which allows for lower customer acquisition costs and deep market penetration in 388 districts. This moat is sustainable due to the group's long-standing legacy and physical network.

Macro Economic Sensitivity

Highly sensitive to rural and semi-urban demand for two-wheelers; Q1 retail sales were 48.12 lakhs but faced a slowdown in Q2, impacting disbursement trends.

Consumer Behavior

Shift towards needing single-stop financing solutions and increasing demand for two-wheelers as economic recovery continues.

Geopolitical Risks

Political risk is monitored as part of the general risk framework, but direct impact is low for domestic retail lending.

⚖️ Regulatory & Governance

Industry Regulations

RBI Non-Banking Financial Company - Scale Based Regulation (SBR) Directions 2023 and SEBI Listing Obligations and Disclosure Requirements (LODR) 2015.

Environmental Compliance

ESG risks are integrated into the risk management framework; specific compliance costs not disclosed.

Taxation Policy Impact

Subject to standard Indian corporate tax rates; PBT for Q2 FY26 was INR 3.72 Cr.

⚠️ Risk Analysis

Key Uncertainties

Asset quality (Gross Stage 3 at 6.1%) and the need for timely capital raising to keep managed gearing below 5x while pursuing aggressive growth.

Geographic Concentration Risk

Significant presence in Southern states, though operations have expanded to 388 districts across 23 states to mitigate regional risks.

Third Party Dependencies

Heavy reliance on Muthoot Fincorp for branch infrastructure and the 'Muthoot Blue' brand identity for customer trust and lead generation.

Technology Obsolescence Risk

Upgrading credit underwriting systems to handle higher volumes and support the 35-45% CAGR growth target.

Credit & Counterparty Risk

Gross Stage 3 assets stood at 6.1% as of September 2025, up from 4.3% in FY25, indicating rising credit risk in the portfolio.