BENGALURU, Feb 6 (Reuters) - Muthoot Finance Ltd reported a third-quarter profit on Monday that beat
analysts' estimates, as higher gold prices boosted demand during
the festive season.
The gold financing company reported a profit of 9.02 billion
rupees ($109.14 million) for the three months ended Dec. 31,
down from 10.29 billion rupees a year earlier hit by lower
interest income, it said in an exchange filing.
However, analysts on average were expecting a profit of 8.75
billion rupees, according to Refinitiv IBES data.
The gold loan industry typically benefits from a surge in
price of the metal. Bullion prices have risen in the recent
months, as demand for gold as a safe-haven investment has
increased due to market volatility.
Analysts have also said that the industry for banks and
non-banking financial companies(NBFC) is expected to see
significant growth in the long run, considering the large
household gold jewellery holding in India, even as more players
enter the gold loan market.
"Despite the challenges, efforts by the NBFC sector has
increased the visibility of gold loans as a safe, secured
lending product," the company said.
In recent months, India has seen a rise in credit off-take,
even as lending costs increased with a pick-up in economic
activities from pandemic lows, which has helped drive robust
earnings for lenders.
The company was helped by a 5.6% rise in loan assets to
577.31 billion rupees, compared to 546.88 billion an year ago.
However, interest income - the difference between interest
earned and paid - fell 7.8% to 26.18 billion rupees in the
quarter.
($1 = 82.6490 Indian rupees)
(Reporting by Ashna Teresa Britto and Priya Sagar in Bengaluru;
Editing by Rashmi Aich)
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