News: Muthoot Finance reported mixed performance in Q1FY25. Credit growth remained strong at 11% QoQ and 23% YoY, led by mix of customer accretion and increase in gold price. Margins remained broadly steady with 11 bps QoQ at 11.5%. However, higher credit cost at 112 bps vs ~50 bps QoQ and YoY, on the back of 70 bps QoQ increase in Stage 3 assets at 3.98%.
Views: Hiccups in asset quality, though no material loss is incurred, could keep profitability volatile. Business growth, ahead of 15% guidance for FY25, is seen to aid valuation.
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