Robust two-wheeler sales and higher geographical spread have enabled Muthoot Capital Services Ltd to achieve a 30 per cent growth in its net profit at ₹8.06 crore in Q2 of FY17 against ₹6.18 crore in the corresponding quarter last year.

This has been achieved in spite of the company having moved to a reduced four-month norm for determining NPAs. Total income for the quarter touched ₹70.08 crore against ₹56.50 crore, registering a growth of 24 per cent.

The company disbursed two-wheeler loans of ₹106 crore in September, crossing the ₹100 crore mark in a single month for the first time. The total assets under management, including the managed portfolio of ₹88 crore, reached ₹1,170 crore at the end of the quarter.

NPAs in absolute terms went lower on quarter-on-quarter basis to ₹66.67 crore (5.7 per cent of the total AUM) as on June 30 from ₹69.37 crore.

During the half year, the company recorded a net profit amounting to ₹12.54 crore, which is 26 per cent higher from ₹9.93 crore.

According to Thomas George Muthoot, Managing Director, Muthoot Capital Services, promising macro indicators and the overall improvement in sentiment that triggered higher rural demand have contributed to the excellent performance.

Encouraging festival sales in Kerala’s core market during Onam was another factor for the growth and the company expects a similar drive from the North during this Diwali to increase the disbursement volume.

R. Manomohanan, company CEO, said that the actual gains from the markets of North Indian states and West Bengal will be reflected in the numbers only from the second half of this fiscal. “We are in the process of tying up with an entity for the digital marketing initiatives, which will help improve volumes in two-wheeler and four-wheeler financing significantly.''

The company is also looking at additional sources of funding, including NCDs and more securitisation transactions.

During the quarter, it has closed a securitisation transaction wherein a pool of its loan assets amounting to ₹111 crore was sold to a special purpose vehicle, enabling it to issue pass through certificates amounting to ₹104 crore, which were purchased by investors. This has enabled the company to lower the cost of funds and improve capital adequacy.