Earnings Review
M&M Financial Services Oct-Dec PAT jumps 63% as impairments fall
This story was originally published at 18:45 IST on 28 January 2025
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--M&M Fincl Oct-Dec net profit INR 8.99 bln
--Analysts saw M&M Fincl Oct-Dec net profit INR 5.86 bln
--M&M Fincl Oct-Dec net profit INR 8.99 bln vs INR 5.53 bln year ago
--M&M Fincl standalone gross NPA ratio at 3.93?c31 vs 3.83% qtr ago
--M&M Fincl Oct-Dec revenue INR 41.43 bln vs INR 34.54 bln year ago
--M&M Fincl standalone net NPA ratio at 2.00?c31 vs 1.59% qtr ago
--M&M Fincl Apr-Dec net profit INR 17.82 bln vs INR 11.41 bln year ago
--M&M Fincl Apr-Dec revenue INR 117.63 bln vs INR 97.50 bln year ago
--M&M Fincl assets under mgmt INR 1.15 tln as on Dec 31, up 19% on year
--M&M Fincl Oct-Dec total income INR 41.44 bln, up 19% on year
--M&M Fincl Oct-Dec net interest income INR 20.99 bln, up 16% YoY
--M&M Fincl Oct-Dec disbursements INR 164.67 bln, up 7% YoY
NEW DELHI – Mahindra & Mahindra Financial Services Ltd. on Tuesday reported a 63% on-year growth in its net profit for the quarter ended December, comfortably beating analysts' estimates, as impairments on financial instruments slumped 97% from a year ago. According to an average of estimates from 10 brokerages, Mahindra Financial's net profit for Oct-Dec was seen growing modestly to INR 5.86 billion. On Tuesday, the company posted a net profit of INR 8.99 billion.
The non-bank lender released its quarterly results post market hours. Its shares ended 4.7% higher on Tuesday at INR 272.00 on the National Stock Exchange.
The sharp rise in the bottom line came on the back of near-negligible impairments in Oct-Dec, with the lender setting aside only INR 91.4 million compared to INR 3.28 billion in the same quarter of 2023-24 (Apr-Mar) as credit cost dropped to zero as a percentage of average total assets. In the corresponding quarter last year, M&M Financial Services' credit cost was 1.2%.
"The collection efficiency remained stable at 95%, consistent with the same quarter of the previous year. With a continued focus on maintaining underwriting standards and addressing early-stage delinquencies, asset quality remained steady. Stage 3 assets stood at 3.9%, versus 4.0% as of Dec. 31, 2023, while Stage 2 assets were at 6.3%, compared to 6.0% on the same date," the company said in a release.
As of Dec. 31, its standalone net non-performing assets ratio was 2.00%, up from 1.59% a quarter ago. The lender held INR 34.96 billion as provision towards expected credit loss as of December end.
On the business front, assets under management rose 19% on year to INR 1.15 trillion as of Dec. 31, with disbursements in Oct-Dec rising 7% to INR 164.67 billion. This helped push the net interest income for the reporting quarter 16% higher from last year to INR 20.99 billion, with revenue from operations rising 20% to INR 41.43 billion.
For the nine months ended December, the net profit of the company was INR 17.82 billion, while revenue from operations was INR 117.63 billion. End
Reported by Siddharth Upasani
Edited by Tanima Banerjee
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