Muthoot Homefin AUM grew 7% while disbursements fell 39%

Muthoot Homefin (India) Limited reported loan assets under management (AUM) of Rs 3,460.1 crore in H1 FY 2027, 7% above H1 FY 2026, while disbursements fell 39% to Rs 277.4 crore. Its Stage III loan-assets ratio rose to 2.50% from 1.69%, even as profit after tax increased 9% to Rs 11.4 crore.

Why did Muthoot Homefin’s AUM rise despite lower disbursements?

Muthoot Homefin’s reported closing loan book was higher year on year even though its H1 FY 2027 disbursement flow was lower. Loan AUM was Rs 3,460.1 crore in H1 FY 2027, compared with Rs 3,246.5 crore in H1 FY 2026, a Rs 213.6 crore increase that the presentation describes as 7% growth. Loan assets, a separately reported measure, rose to Rs 3,003.9 crore from Rs 2,785.8 crore.

Disbursements were Rs 277.4 crore in H1 FY 2027, down from Rs 454.9 crore in H1 FY 2026. The Rs 177.5 crore reduction represents a 39% year-on-year decline. The presentation does not state a reason for the lower disbursement volume.

Quarterly figures show that disbursements slowed further during the half year. Muthoot Homefin disbursed Rs 123 crore in Q2 FY 2027, below Rs 154.4 crore in Q1 FY 2027. The Q2 figure accounted for 44% of H1 FY 2027 disbursements, while the AUM figure was Rs 3,496.2 crore in Q1 before declining to Rs 3,460.1 crore in Q2.

The comparison with FY 2026 separates the higher year-on-year AUM from the recent quarterly movement. Loan AUM of Rs 3,460.1 crore in H1 FY 2027 was Rs 24.5 crore below the Rs 3,484.6 crore reported for FY 2026. Loan assets, however, were Rs 3,003.9 crore in H1 FY 2027, above Rs 2,974.2 crore at FY 2026 end.

What housing-finance customers and locations does Muthoot Homefin serve?

Muthoot Homefin targets Economically Weaker Sections (EWS) and Lower Income Groups (LIG) in Tier II and Tier III locations. It is a registered housing finance company under the National Housing Bank and operates a hub-and-spoke model with centralised processing at its Mumbai corporate office.

Muthoot Homefin reported operations across 18 states and union territories in H1 FY 2027. Its network included 176 branches and 176 sales offices, compared with 166 branches and 166 sales offices in H1 FY 2026. Both branch and sales-office counts were unchanged from Q1 FY 2027, when each stood at 176.

Employee numbers declined while customer numbers increased from the prior-year half. Muthoot Homefin had 905 employees in H1 FY 2027, compared with 1,022 in H1 FY 2026 and 969 at FY 2026 end. Its customer count was 35,036, above 32,761 a year earlier but below 35,184 in Q1 FY 2027.

How did Muthoot Homefin’s asset quality change in H1 FY 2027?

Muthoot Homefin’s Stage III loan-assets ratio rose to 2.50% of gross loan assets in H1 FY 2027 from 1.69% in H1 FY 2026. Stage III loan assets increased to Rs 75.1 crore from Rs 47 crore, a Rs 28.1 crore rise. The ratio was 2.63% at FY 2026 end, when Stage III loan assets were Rs 78.1 crore.

Expected credit loss (ECL) provisions also increased year on year. Total ECL provision was Rs 51.3 crore in H1 FY 2027, compared with Rs 44.5 crore in H1 FY 2026, while ECL provision as a share of gross loan assets increased to 1.71% from 1.60%. Stage III ECL provision rose to Rs 23 crore from Rs 21.4 crore.

The quarter-on-quarter data show a modest decline in Stage III balances but limited change in the ratio. Stage III loan assets were Rs 75.9 crore in Q1 FY 2027 and Rs 75.1 crore in Q2 FY 2027, while the respective ratios were 2.52% and 2.50%. Total ECL provision was Rs 49.4 crore in Q1 and Rs 51.3 crore in Q2.

Did Muthoot Homefin’s earnings and funding measures change?

Muthoot Homefin’s profit after tax increased to Rs 11.4 crore in H1 FY 2027 from Rs 10.4 crore in H1 FY 2026. Profit before tax declined to Rs 17.2 crore from Rs 18.6 crore, while total revenue increased to Rs 218.2 crore from Rs 214.4 crore. Total expenses rose to Rs 201 crore from Rs 195.8 crore.

Q2 FY 2027 profit was higher than Q1 despite broadly similar revenue. Profit after tax was Rs 7.1 crore in Q2, compared with Rs 4.2 crore in Q1, and profit before tax was Rs 11.1 crore versus Rs 6.1 crore. Revenue was Rs 108.7 crore in Q2 and Rs 109.5 crore in Q1, while expenses declined to Rs 97.6 crore from Rs 103.4 crore.

Reported margin and return measures moved in different directions year on year. Net interest margin was 6.33% in H1 FY 2027, compared with 6.01% in H1 FY 2026, and interest spread increased to 4.79% from 4.60%. Return on assets was 0.76% versus 0.79%, return on equity was 2.97% versus 4.01%, and the cost-to-income ratio declined to 43.93% from 45.64%.

Borrowings were Rs 2,419.9 crore in H1 FY 2027, above Rs 2,279.2 crore a year earlier but below Rs 2,444 crore in Q1 FY 2027. Shareholders’ funds increased to Rs 772 crore from Rs 725.6 crore, while the capital adequacy ratio was 29%, compared with 30% in H1 FY 2026. The debt-equity ratio was 3.13, versus 3.14 a year earlier.

Conclusion

Muthoot Homefin’s H1 FY 2027 results show a larger year-on-year affordable-housing loan book and higher profit after tax alongside a sharp reduction in new disbursements. The combination of Rs 3,460.1 crore in AUM, Rs 277.4 crore in disbursements and a 2.50% Stage III ratio indicates that loan-book growth, origination flow and reported credit quality moved in different directions.

The unresolved issue for subsequent reporting is whether disbursements recover from Rs 123 crore in Q2 FY 2027 while the Stage III ratio remains near 2.50%. Changes in the 176-branch network, 35,036-customer base, ECL provision and AUM will provide the reported measures of portfolio movement in later periods.