Mahindra & Mahindra Financial Services's first quarter profit and net interest income are expected to show a 11 percent each, according to the average of estimates of analysts polled by CNBC-TV18. The non-banking finance company will declare its earnings on July 24.
Standalone profit is seen going up to Rs 172 crore in the quarter ended June from Rs 154.9 crore in the same quarter last year and net interest income may climb to Rs 756 crore from Rs 680.2 crore during the same period. Net interest income is the difference between interest earned and interest expended.
Net interest margin could improve or remain stable in June quarter despite pressure in other parameters.
Analysts feel provisions for bad loans may be lower Y-o-Y due to high base in the year-ago period but may decline on sequential basis. Provisions in Q1FY15 rose by 79.7 percent Y-o-Y to Rs 225 crore and Q4FY15 provisions jumped 99.7 percent Y-o-Y (down 44 percent Q-o-Q) to Rs 149.29 crore.
Asset under management growth is expected to be 10-12 percent in FY16 with underlying assumption of tractor pick up in October 2015-March 2016 period.
Analysts believe overall asset quality improvement may only be gradual going forward. Trends may continue to remain muted on collections in Kerala, Andhra Pradesh and Maharashtra. If monsoon is as low as 88 percent of historical levels as projected by India Meteorological Department (IMD), then recovery is likely to take much longer, they said.
In asset quality, gross non-performing assets (NPA) in Q4 declined 120 basis points sequentially (up 110 basis points year-on-year) to 5.9 percent.
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