India`s Muthoot Finance beats profit view on strong demand for gold loans
Muthoot Finance, India's largest gold-loan provider, reported a bigger-than-expected third-quarter profit on Wednesday, aided by strong loan demand.
The company's quarterly profit rose 33% to 13.63 billion rupees ($156.9 million) in the quarter ended December 31.
Analysts, on average, had estimated a profit of 13.22 billion rupees, according to data compiled by LSEG.
Gold prices hit multiple record highs during the quarter. This benefits gold financiers as higher prices mean one can get a bigger loan for the same amount of gold.
Additionally, analysts said that as unsecured lending continued to slow due to rising bad loans, people began shifting towards gold loans as an alternative source of funds.
Muthoot's standalone loan assets under management were 974.87 billion rupees as of December 31, higher by 37% year-on-year.
The company's interest income rose 40% to 43.69 billion rupees.
Smaller rival Manappuram Finance will report its third-quarter results on Thursday.
Shares of Muthoot Finance ended 0.2% lower ahead of the results.
($1 = 86.8925 Indian rupees)
