The Board of Directors of Mahindra & Mahindra Financial Services Limited (Mahindra Finance), a leading provider of financial services in the rural and semi-urban markets, at its meeting held on Friday, announced the unaudited financial results for the quarter ended June 30, 2023, the company announced through an exchange filing.
Standalone results key highlights
Total Income was at ₹3,125 Crore for the quarter, an increase of 25 percent YoY aided by growth in asset book.
Loan Book increased sequentially by 4.8 percent to ₹86,732 Crore with improvement in disbursements. Disbursements at ₹12,165 crores were higher by 28 percent YoY.
Net Interest Margin for the quarter was at 6.8 percent; Net Interest Income at ₹1,675 Crore increased by 7 percent YoY, impacted by change in portfolio mix and increased interest costs.
Profit after Tax (PAT) was at ₹353 Crore for the quarter as against ₹223 Crore during Q1FY23, a growth of 58 percent YoY. Gross Stage 3 came down marginally from 4.5 percent in March to 4.3 percent in June, aided by focused collection initiatives.
The Company’s Capital Adequacy is healthy at 21.2 percent. Provision coverage on Stage 3 loans maintained at 60.1 percent. As of June end, the Company carried a total liquidity buffer of approximately ₹9,350 Crore -covering 3 months’ obligations.
Consolidated Results
The Total Income increased by 25 percent at ₹3,637 Crore during the quarter ended June 30, 2023, as against ₹2,914 Crore during the corresponding quarter last year. The PAT stood at ₹362 crore during the quarter ended June 30, 2023, as against ₹ 240 Crore during the corresponding quarter last year.
Operations
During the first quarter of FY24, the Company maintained its leadership position in Tractor and Mahindra Auto vehicle segments. The disbursement growth was broad-based across vehicle segments. Going forward, the Company shall focus on maintaining the market leadership in core segments, while accelerating growth in pre-owned vehicle segment, SME, Leasing and personal loans.
Collection efficiency during the quarter remained strong at 94 percent, similar to the level observed in Q1 FY23. Stage-3 assets at 4.3 percent (4.5 percent as of March 2023), and Stage-2 assets, at 6.4 percent (6 percent as of March 2023), remained stable. Focus on collections including use of digital payment channels and effective use of legal machinery are helping maintain healthy asset quality. The gap between GNPA (as per IRACP) and Gross Stage- 3 (as per IND-AS) is now range-bound and was at ₹ 1,144 crore as at June end (₹ 1,184 crore as at March end). The restructured portfolio has now reduced to ₹ 1,860 crore from ₹ 2,174 crore as a the end of March 2023.
The Balance Sheet remains strong with Capital adequacy at 21.2 percent. In addition, the company maintained a comfortable liquidity chest equivalent to three months' requirements. The provision coverage on stage 3 assets continued to be sufficient at 60.1 percent.
The partnerships launched over the previous quarters with - India Post Payments Bank for enhancing distribution and increasing collection touchpoints; Bank of Baroda to facilitate coorigination; Car&Bike and Ruppy to launch ‘Used Car Digi Loans’ are seeing good traction. The Company is implementing state-of-the-art Loan Origination and Loan Management systems, which will be further supported by various APIs to link to third party tech solutions.
Mahindra & Mahindra Financial Services Limited shares
The shares of Mahindra & Mahindra Financial Services Limited on Friday at 3:19 pm IST were at ₹299.15, down by 4.10 percent.
