Results: Mahindra Finance net profit falls 8% to Rs 219 crore in March quarter

Mahindra & Mahindra Financial Services (Mahindra Finance) on Friday reported an 8 per cent decline in its consolidated net profit at Rs 219 crore for the quarter ended March 31.

The company's net profit had stood at Rs 239 crore during the similar January-March quarter of the preceding fiscal year 2019-20.

Its consolidated total income declined marginally at Rs 3,038 crore during the quarter ended March 31, 2021, against Rs 3,140 crore a year ago, Mahindra Finance said in a statement.

On a standalone basis, the company's net profit in the January-March 2021 period declined 32 per cent year-on-year to Rs 150 crore, while income declined marginally by 1.4 per cent at Rs 2,638 crore.

The pre-provision profits stood at Rs 1,057 crore, a growth of 9 per cent over the corresponding period last year, said the company.

For the full year FY21, the consolidated net profit declined by 28 per cent to Rs 780 crore and the income was down by 1 per cent to Rs 12,171 crore.

Mahindra Finance said its board has recommended a dividend of Rs 0.80 per share, subject to approval of the members at the ensuing annual general meeting of the company.

On the non-performing assets, it said the gross NPA Stage 3 levels (bad loans) stood at 9 per cent as on March 31, 2021, against 8.4 per cent as on March 31, 2020.

"The impact of COVID-19 on the global economy and how governments, businesses and consumers respond is uncertain.

"This uncertainty is reflected in the company's assessment of impairment loss allowance on its loans (done as per expected credit loss method in lnd-AS). This allowance is subject to a number of management judgements and estimates," it said.

Citing the regulatory expectation of the RBI to bring down the net NPA ratio below 4 per cent, the company said the management has agreed with, and has recorded an additional provision of Rs 1,320 crore during the quarter on Stage 3 loans.

Resultantly, the company's net NPA ratio stands at 3.97 per cent by the end of March 2021. The stage 3 provisioning coverage ratio stood at 57.9 per cent.

Mahindra Finance said the final impact of this pandemic is uncertain and the actual impact may be different than that estimated based on the conditions prevailing as at the date of approval of these financial results.

"The management will continue to closely monitor the material changes in the macro-economic factors impacting the operations of the company," it said.

The company's standalone assets under management (AUM) comprising loan assets and investments stood at Rs 81,689 crore as on March 31, 2021, as against Rs 77,160 crore a year ago, registering a growth of 6 per cent, it said.

On the business activity, it said the company continues to be a leading financer for automotive and tractors, including the pre-owned vehicle segment, in rural and semi-urban markets.

During 2020-21, the total disbursements (amount financed) was at Rs 19,001 crore as against Rs 32,381 crore in the year-ago period, down by 41 per cent.

The loan assets stood at Rs 64,608 crore as on March 31, 2021, compared to Rs 68,089 crore a year ago, it said.

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