MGFL Q2 PAT rises 148.5% as operating costs trail income growth

Mufin Green Finance Limited reported standalone Q2 FY27 profit after tax of Rs 15.06 crore, up 148.5% from Rs 6.06 crore in Q2 FY26, as interest income increased 80.2% while operating expenses rose 27.7%. The result shows operating-cost growth lagging income growth, although interest expenses increased 103.7% year on year.

Why did MGFL's Q2 FY27 profit rise so sharply?

MGFL's Q2 FY27 profit rose because net interest income and operating costs moved at markedly different rates from the previous year. Interest income increased to Rs 86.18 crore from Rs 47.81 crore, adding Rs 38.37 crore, while operating expenses increased to Rs 14.24 crore from Rs 11.15 crore. Profit before tax consequently rose 135.9% to Rs 19.47 crore from Rs 8.25 crore.

The cost pattern is the central operating-leverage measure disclosed in the presentation: operating expenses rose 27.7%, compared with 80.2% growth in interest income. Net interest income, which is interest income less interest expenses, increased 52.4% to Rs 33.27 crore from Rs 21.84 crore. After tax, MGFL retained Rs 15.06 crore in Q2 FY27, compared with Rs 6.06 crore a year earlier.

How did higher funding costs affect MGFL's Q2 earnings?

MGFL's funding costs rose faster than its interest income in Q2 FY27, with interest expenses increasing 103.7% to Rs 52.91 crore from Rs 25.98 crore. The Rs 26.93 crore increase in interest expenses was smaller in absolute terms than the Rs 38.37 crore increase in interest income, allowing net interest income to grow by Rs 11.43 crore.

The presentation therefore shows both profit expansion and a higher interest-expense burden in the year-on-year comparison. Interest expenses rose faster than interest income, while net interest income grew 52.4%, below the 80.2% increase in interest income. The disclosed figures do not provide a net interest margin or borrowing-rate measure, so the presentation does not quantify the underlying pricing or funding-mix drivers.

Quarter on quarter, net interest income declined to Rs 33.27 crore in Q2 FY27 from Rs 35.16 crore in Q1 FY27. Profit before tax nevertheless rose to Rs 19.47 crore from Rs 18.82 crore over the same periods, while the presentation's quarterly series shows Q2 FY27 profit before tax above Q2 FY26's Rs 8.25 crore and Q4 FY26's Rs 14.83 crore.

What did MGFL report for the first half of FY27?

MGFL reported H1 FY27 profit after tax of Rs 29.07 crore, a 185.8% increase from Rs 10.17 crore in H1 FY26. H1 profit before tax rose 178.3% to Rs 38.29 crore from Rs 13.76 crore, exceeding the Rs 37.98 crore reported for the whole of FY26.

Interest income in H1 FY27 reached Rs 162.62 crore, up 78.4% from Rs 91.18 crore, while interest expenses rose 83.2% to Rs 94.18 crore. Net interest income increased 72.1% to Rs 68.44 crore, compared with Rs 39.77 crore in H1 FY26. Operating expenses rose 22.4% to Rs 27.79 crore from Rs 22.70 crore, again growing more slowly than interest income and net interest income.

The half-year figures imply that Q2 contributed Rs 15.06 crore of the Rs 29.07 crore H1 profit after tax, with the balance of Rs 14.01 crore generated in Q1 FY27. H1 FY27 profit after tax was also Rs 0.80 crore above FY26's full-year Rs 28.27 crore, although the presentation does not provide an FY27 profit target.

How did MGFL's balance sheet and capital ratios change?

MGFL's loan book, measured as assets under management, increased to Rs 1,766.07 crore at Sep-26 from Rs 1,541.17 crore at Mar-26. Over the same period, total borrowings rose to Rs 1,745.71 crore from Rs 1,397.60 crore, total assets increased to Rs 2,396.90 crore from Rs 2,027.51 crore, and net worth grew to Rs 604.72 crore from Rs 574.70 crore.

Leverage rose alongside the loan book: debt-to-equity increased to 2.89 times at Sep-26 from 2.43 times at Mar-26. Capital adequacy ratio, or CRAR, declined to 27.73% at Sep-26 from 32.37% at Mar-26 and 30.55% at Jun-26. The Sep-26 ratio remained above the stated regulatory minimum of 15%, and management says this capital level could fund several quarters of assets-under-management growth without fresh equity.

MGFL also reported productivity improvement during the period. Assets under management per employee rose to Rs 5.77 crore in Q2 FY27 from Rs 4.36 crore in Q1 FY27 and Rs 2.26 crore in Q2 FY26, while headcount declined to 306 in Sep-26 from 367 in Jun-26 and 454 in Q2 FY26. These measures coincided with the 27.7% year-on-year increase in Q2 operating expenses.

Conclusion

MGFL's Q2 FY27 outcome combined Rs 15.06 crore of profit after tax, up 148.5% year on year, with operating-expense growth of 27.7% and interest-income growth of 80.2%. The same results also show the offsetting funding-cost issue: interest expenses rose 103.7%, faster than income, even as net interest income reached Rs 33.27 crore.

The next disclosed measures to watch are whether loan-book growth from Rs 1,766.07 crore at Sep-26 continues within management's stated capital headroom, and how debt-to-equity and CRAR develop. Borrowings had reached Rs 1,745.71 crore and CRAR had declined to 27.73% by Sep-26, though that ratio remained above the 15% regulatory minimum.