Manappuram and Muthoot are the most profitable NBFCs in India. You can see this from Figure 2 of an earlier post here. I’m using return on assets (ROA) as measure of profitability. ROA is the core profitability of the business without taking leverage into account. For FY18, the ROA of Manappuram and Muthoot was 4.8% (5.5% in FY17) and 5.5% (3.8% in FY17) respectively. The ROA for Manappuram and Muthoot for H1 FY19 was 4.6% and 5.6% respectively. An ROA of 2% is generally considered respectable for financial institutions and anything close to 5% is unheard of. So, the question is – what is so special about these two companies…