Synopsis
Muthoot Microfin Limited's stock has plummeted to a new 52-week low of Rs 123.65, reflecting a significant decline of over 45% in the last six months due to weak financial results and rising challenges in the microfinance sector.Key Takeaways
- Muthoot Microfin's stock reached a 52-week low of Rs 123.65.
- It has dropped over 45% in six months.
- Profit after tax decreased by 96.95% YoY to Rs 3.80 crore.
- Gross NPA ratio increased to 2.7% in Q2.
- Operating profit grew by 26% to Rs 236 crore.
Mumbai, March 11 (NationPress) Muthoot Microfin Limited's stock continued its downward trend on Tuesday, reaching a new 52-week low of Rs 123.65 during the intra-day trading session.
The stock decreased by Rs 3.89, which is over 3 percent, closing the trading session at Rs 125.15 on the National Stock Exchange (NSE).
Investors have faced significant losses recently; in the past five days, the stock fell by Rs 7.7, equivalent to 5.8 percent.
In the last month, it has dropped by Rs 25.9, or 17.16 percent. Over six months, the decline exceeds Rs 100, nearly 45 percent of its original value.
In the past five years, the stock has plummeted by over 50 percent, losing Rs 126.15.
The stock's weak performance coincides with disappointing financial results for the third quarter. Muthoot Microfin's operating profit decreased by 9.58 percent to Rs 324.69 crore year-on-year (YoY).
Its profit after tax (PAT) fell dramatically by 96.95 percent YoY, dropping to Rs 3.80 crore, as reported in its exchange filing dated February 6.
The company's operating margin also weakened to 47.69 percent, down by 23.40 percent compared to the previous year. Net income before taxes was Rs 5.06 crore, a 96.1 percent decline YoY.
In Q2 of the current financial year (Q2 FY25), Muthoot Microfin's net profit also dropped 44 percent to Rs 61.6 crore from Rs 110 crore in the same period last year (Q2 FY24).
This decline was primarily attributed to challenges in the microfinance sector and rising employee costs, as indicated in its exchange filing.
Despite the profit decrease, the company's operating profit increased by 26 percent to Rs 236 crore.
However, the lender had to allocate Rs 155 crore for bad loans, significantly higher than the Rs 41 crore set aside a year prior.
Moreover, the company's bad loans rose, with the gross non-performing assets (NPA) ratio climbing to 2.7 percent in Q2, compared to 2.3 percent last year.
The decline in financial performance has adversely affected investor sentiment, further compounding the stock's challenges in recent months.
