M&M Financial Services Q1 net profit rises 51% on-year to Rs 362 crore

The company’s loan book increased sequentially by 4.8 percent to Rs. 86,732 Crore with improvement in disbursements.

Mahindra & Mahindra Financial Services on July 28 reported consolidated net profit of Rs 362.22 crore for the quarter ended June 2023, registering a growth of 51.01 percent  over Rs 239.86 crore profit reported in the same quarter last year.

The total income increased by 25 percent to Rs 3,637 crore during the quarter ended June 30, 2023, as against Rs 2,914 crore during the corresponding quarter last year, the company said in an exchange filing. .

On a standalone basis, revenue was at Rs 3,125 Crore, rising 25 percent YoY and net profit at Rs 353 crore, up 58 percent YoY. The company said net interest margin for the quarter was at 6.8 percent while net interest income (NII) was at Rs 1,675 crore, increased by 7 percent YoY, impacted by change in portfolio mix and increased interest costs.

The company’s loan book increased sequentially by 4.8 percent to Rs. 86,732 Crore with improvement in disbursements. Disbursements at Rs. 12,165 crores were higher by 28 percent YoY.

During the first quarter of FY24, the company said it maintained its leadership position in tractor and Mahindra auto vehicle segments. The disbursement growth was broad-based across vehicle segments.

"Going forward, the Company shall focus on maintaining the market leadership in core segments, while accelerating growth in pre-owned vehicle segment, SME, Leasing and personal loans, " said the company.

Collection efficiency during the quarter remained at 94 percent, similar to the level observed in Q1FY23. Focus on collections including use of digital payment channels and effective use of legal machinery are helping maintain healthy asset quality, the firm said.

The gap between GNPA (gross non-performing assets) and gross stage- 3 is now range-bound and was at Rs 1,144 crore as at June end (Rs 1,184 crore as at March end). The restructured portfolio has now reduced to Rs 1,860 crore from Rs 2,174 crore as a the end of March 2023, the company said in a release.