BENGALURU (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)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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