Muthoot Microfin lifts IT spending 40% as loan book beats growth guidance

what happened

Muthoot Microfin has raised its IT spending by 40% this financial year as AI-assisted attacks increasingly target financial institutions, according to Moody's, which cites an interview with the company's chief executive, Sadaf Sayeed, in Mint. The lender is strengthening cybersecurity and digital infrastructure. Its application system is developed in-house and hosted on a private cloud with several layers of protection.

In the July–September quarter, assets under management rose 22% year on year to Rs 15,322 crore, above the company's earlier growth guidance of 18–20%. Net profit climbed to Rs 110.8 crore from about Rs 30 crore a year earlier, bringing first-half FY27 profit to Rs 192 crore. Gross non-performing assets fell to 3.38%.

The company is also diversifying beyond its traditional joint liability group lending, which still makes up 69% of its portfolio, and targets AUM of about Rs 17,000 crore by the end of FY27.

why it matters

For markets, the key points are the strong results and a cost of funds that fell to 9.93%, below 10% for the first time, which supports net interest margins. The company expects full-year profit of Rs 425–450 crore, roughly one and a half times the first-half figure. The report covers a single lender, but it shows how growth and rising cyber risks are both shaping Indian microfinance.

market impact

Muthoot Microfin shares: results above guidance and cheaper funding support the stock

• ▲Muthoot Microfin shares pressure up — profit and asset quality beat guidance while funding costs fell

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