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 today, announced the unaudited financial results for the quarter and half-year ended September 30, 2023, the company announced through an exchange filing.
FY 2024 Q2 Standalone Results
The Key highlights of the Financial Performance:
Disbursements during this quarter amounted to Rs. 13,315 crores, representing a substantial 13% year-on-year increase. Furthermore, the loan book exhibited a sequential growth of 8.1%, reaching Rs. 93,723 crore. The quarter's total income surged to Rs. 3,240 crore, marking a remarkable 24% year-on-year increase, primarily attributed to the growth in the asset book.
The net interest income for this quarter stood at Rs. 1,674 crore, showing a 9% year-on-year increase. However, the net interest margin for the quarter was recorded at 6.5%, impacted by higher borrowing rates, coupled with a change in the portfolio mix, favoring customers with better credit quality.
The gross Stage 3 level was maintained at 4.3%, in line with the June-end levels, while gross Stage 2 improved from 6.4% to 5.7% during the same period. The credit cost for Q2 FY24 was reported at Rs. 627 crore, equivalent to 2.4% of average assets, compared to Rs. 198 crore (1.0%) in Q2 FY23. Additionally, net write-offs decreased to Rs. 351 crore from Rs. 543 crore in Q2 FY23. In the previous year's second quarter, there was a significant improvement in both Stage 2 and Stage 3, leading to a provision write-back of Rs. 345 crore. Presently, both Stage 2 and Stage 3 have stabilized at more normalized levels, resulting in a provision charge of Rs. 276 crore for Q2 FY24.
The profit after tax (PAT) for the quarter amounted to Rs. 235 crore, in contrast to Rs. 448 crore reported during Q2 FY23. The company maintains a healthy capital adequacy of 18.7%, and the provision coverage on Stage 3 loans remains prudent at 61.2%. As of the end of September, the company maintained a total liquidity buffer of approximately Rs. 8,300 crore, covering a little over 2.5 months' gross obligation.
FY 2024 H1 Standalone Results
Total Income was at Rs. 6,366 crore for the half year, an increase of 25%, as against Rs. 5,108 crores during the corresponding half year last year. Net Interest Income at Rs. 3,349 crore increased by 8% YoY. Net Interest Margin at 6.6%.
Credit Costs during the half year was at Rs. 1,153 crores (2.3%) against Rs. 844 crores (2.1%) in the first half of previous year. The increase in credit costs is attributed to the sharp reversal in Gross Stage 2 in the previous year which is now at stable levels.
PAT was at Rs. 588 crore during the half year ended September 30, 2023, as against Rs. 671 crore during the corresponding half year last year. For the full year FY24, the Company expects the credit charge in the range of 1.5% to 1.7
