The rise in Mahindra & Mahindra Finance’s (M&M Finance) gross non-performing asset ratio (GNPA) to 8 percent as on June end from 7. 7 percent as on March 31 is in line with the seasonal trend, Managing Director (MD) and Vice-Chairman Ramesh Iyer told Moneycontrol on August 2. Particularly, rural areas report higher NPAs during Q1 and Q2 of a financial year, he said.
“In the past, we have always seen increase is much steeper. This year, because tourism continued in April and May, a lot of people movement was happening and contracting segment was performing, therefore, we have seen very marginal increase from 7.7 percent to 8 percent, which is hardly any percentage in increase, and it is much different from the trends seen in the past,” Iyer said.s on June end, M&M Finance’s gross stage-3 ratio (GNPAs) increased to 8.03 percent from 7.66 percent as of March 31, while stage-2 ratio declined to 11.72 percent as on June end from 14.25 percent as on March 31. Net NPA ratio stood at 3.53 percent as on June 30 versus 3.36 percent a quarter ago.
Write-offs rose to Rs 570 crore in April-June from Rs 302 crore during the corresponding period of the previous fiscal. As per Iyer, write-offs rose during Q1FY23 as the NBFC had repossessed more vehicles during the previous quarter.
“So, when you sell off those vehicles, you do get some losses because these are all vehicles where the loan outstanding was high,” the MD said.