Mumbai: Mahindra Rural Housing Finance (MRHFL) bounced back to profitability in the December quarter (Q3 FY2026), posting a standalone net profit of Rs 720 crore despite a one-time expense of Rs 1,218 crore from new labour code adjustments.
Revenue rises sequentially
Total income for Q3 stood at Rs 29,004 crore, up from Rs 28,268 crore in Q2. Interest income accounted for Rs 27,438 crore, with an additional Rs 885 crore from fees and commissions. Other income contributed Rs 447 crore.
The quarter’s total revenue from operations reached Rs 28,557 crore, marking a sequential improvement. This rebound was supported by stable financing costs and higher non-interest earnings.
Net profit impacted by labour provisions
MRHFL reported a profit before tax of Rs 962 crore for Q3, compared to Rs 1,463 crore in the previous quarter. This included an exceptional item of Rs 1,218 crore related to revised employee retirement benefits following India's implementation of new labour codes.
After accounting for taxes of Rs 242 crore, net profit for the quarter stood at Rs 720 crore. The company’s earnings per share for Q3 was Rs 0.59.
Credit provisions and asset quality improve
Loan loss provisions dropped sharply to Rs 540 crore in Q3 from Rs 1,595 crore in Q2. The company also revised its Expected Credit Loss (ECL) policy during the quarter, adding Rs 747 crore in provisions as a result.
Asset quality showed a healthy trend, with gross stage 3 loans (bad loans) declining to 2.79 percent from 9.41 percent a year ago. Net stage 3 assets also fell to 0.93 percent, indicating tighter risk control. Provision coverage for bad loans improved to 67.5 percent, up from 47.9 percent in the same quarter last year.
Looking ahead cautiously
Chairman Raul Rebello indicated that MRHFL is carefully adapting to regulatory changes while maintaining credit discipline. Liquidity remains strong with a coverage ratio of 133 percent, and the company confirmed full utilization of Rs 450 crore raised through recent debt placements.
The company continues to focus on managing risk and strengthening operational efficiency amid shifting regulatory landscapes.
Disclaimer: This article is based on publicly disclosed unaudited financial results. It does not constitute investment advice. Readers should verify data independently before making financial or investment decisions.
