Belstar Microfinance Q1 FY27 Performance Overview: Turnaround to Profitability at ₹66 Crore as Asset Quality Improves

Microfinance institution Belstar Microfinance Limited (BML), a subsidiary of Muthoot Finance Limited (which holds a 66.13% stake), reported its operational and financial results for the first quarter ended June 30, 2026 (Q1 FY27).

The NBFC-MFI recorded a sharp profitability turnaround for the quarter, supported by reduced provisions, improving asset quality, and expanded operational reach across India.

Key Financial Highlights

1. Revenue & Profitability Turnaround

Profit After Tax (PAT): Reported a profit of ₹66 crore for Q1 FY27, successfully reversing a net loss of ₹128 crore in Q1 FY26 (though down sequentially from ₹133 crore in Q4 FY26).

Total Revenue: Grew 9% YoY to ₹452 crore in Q1 FY27 compared to ₹414 crore in Q1 FY26 (down from ₹517 crore in Q4 FY26).

Total Expense: Dropped significantly to ₹360 crore in Q1 FY27 from ₹585 crore in Q1 FY26.

Profit Before Tax (PBT): Came in at ₹92 crore, compared to a PBT loss of ₹171 crore in the year-ago period.

2. Loan Assets & Capital Adequacy

Loan AUM: Stood at ₹7,842 crore as of June 30, 2026, registering a 1.8% YoY growth compared to ₹7,707 crore in Q1 FY26 (and down sequentially from ₹8,222 crore in Q4 FY26).

Loan Assets: Reached ₹7,050 crore, up from ₹6,902 crore in Q1 FY26 and ₹6,765 crore in Q4 FY26.

Capital Adequacy Ratio (CAR): Strengthened to 25% as of June 30, 2026, compared to 23% in Q1 FY26 and 24% in Q4 FY26.

Shareholders' Funds (Net Worth): Expanded to ₹1,861 crore, up from ₹1,643 crore in Q1 FY26 and ₹1,795 crore in Q4 FY26. Total Assets stood at ₹7,575 crore.

3. Asset Quality & Provisions

Stage III Loan Assets: Decreased substantially to ₹201 crore as of June 30, 2026, down from ₹320 crore in Q1 FY26 and ₹402 crore in Q4 FY26.

% Stage III Assets: Gross Stage III ratio improved to 2.85% on Gross Loan Assets, compared to 4.44% in Q1 FY26 and 5.54% in Q4 FY26.

ECL Provisions: Total Expected Credit Loss (ECL) provisions dropped to ₹281 crore (3.99% of Gross Loan Assets), down from ₹439 crore (6.12%) in Q1 FY26. Stage III ECL provisions stood at ₹196 crore.

Operational Network & Credit Rating

Geographic Presence & Infrastructure

Branch Network: Expanded to 1,331 branches supported by 260 controlling regional offices as of June 30, 2026 (up from 1,275 branches in Q1 FY26 and 1,312 in Q4 FY26).

Geographic Spread: Operations span 19 states and 2 Union Territories (Tamil Nadu, Andhra Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Kerala, Odisha, Chhattisgarh, Gujarat, Rajasthan, Bihar, Uttar Pradesh, Uttarakhand, West Bengal, Pondicherry, Telangana, Jharkhand, Haryana, Punjab, Tripura, and Delhi).

Human Resources: Total staff strength stood at 10,819 employees at the end of the quarter.

Credit Rating Profile

Long-Term Rating: Credit rating agency CRISIL has assigned a long-term debt rating of CRISIL AA/Stable for BML's bank limits and debt instruments, indicating a high degree of safety regarding timely servicing of financial obligations and very low credit risk.

Company Overview

Incorporated in January 1988 at Bangalore, BML was registered with the RBI as an NBFC in March 2001 and reclassified as an NBFC-MFI on December 11, 2013. Acquired by the Hand in Hand group in September 2008 to provide scalable microfinance services to entrepreneurs nurtured by its Self Help Group (SHG) program, the company commenced initial lending operations in Haveri District, Karnataka, in March 2009. Today, Muthoot Finance holds a majority 66.13% equity stake in the company.

Shares of Muthoot Finance Limited was last trading in BSE at Rs. 3120.10 as compared to the previous close of Rs. 3008.55. The total number of shares traded during the day was 61492 in over 5022 trades.

The stock hit an intraday high of Rs. 3144.60 and intraday low of 3015.00. The net turnover during the day was Rs. 191022784.00.

Source : Equity Bulls

Keywords

BelstarMicrofinance MuthootFinance INE414G01012 MFI Q1FY27 Q1FY2027 ResultUpdate