News: Muthoot Finance reported mixed performance in Q2FY24. Standalone AUM growth came healthy at 21% to Rs 69002 crores, primarily driven by increase in gold price. However, spreads declined by 48 bps sequentially to 9.19%, led by decline in yields. The company sold Rs 700 crore worth of loans to ARC during the quarter. Despite the sale to ARC, Stage 3 assets declined sequentially by 4.6%, while the ratio declined of stage 3 assets declined by 25 bps QoQ at 4.01%.
Views: Growth guidance remain unchanged at 18- 20% for FY24. However, steady NPA number despite sale to ARC raises concern on slippages, which may not necessarily result in loss.
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