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Informist, Tuesday, Jul. 22, 2025

 

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--M&M Fincl Apr-Jun net profit INR 5.30 bln 
--Analysts saw M&M Fincl Apr-Jun net profit at INR 5.37 bln 
--M&M Fincl Apr-Jun net profit INR 5.30 bln vs INR 5.13 bln year ago 
--M&M Fincl Apr-Jun revenue INR 44.19 bln vs INR 37.22 bln year ago 
--M&M Fincl capital adequacy ratio at 20.62% as on Jun 30 
--M&M Fincl liquidity coverage ratio at 322% as on Jun 30 
--M&M Fincl gross stage 3 asset ratio 3.85% on Jun 30 vs 3.69% Mar 31 
--M&M Fincl net stage 3 asset ratio 1.91% on Jun 30 vs 1.84% Mar 31 
--M&M Fincl Apr-Jun net interest income INR 22.85 bln, up 18% on year 
--M&M Fincl Apr-Jun net interest income margin 6.7% vs 6.6% year ago 
--M&M Fincl Apr-Jun disbursements INR 128.08 bln, up 1% on year 
--M&M Fincl assets under mgmt INR 1.22 tln as on Jun 30, up 15% on year 
--M&M Fincl Apr-Jun credit cost 1.9% vs 1.5% year ago 
--M&M Fincl Q1 impairment on fincl instruments INR 6.6 bln vs INR 4.5 bln 
 

 

By Cassandra Carvalho

 

MUMBAI – Mahindra & Mahindra Financial Services Ltd. Tuesday reported a net profit of INR 5.30 billion in the June quarter, almost in line with expectations, on the back of a rise in interest income. However, its bottom line fell sequentially due to an increase in credit costs and meagre growth in disbursements.    

 

The vehicle financier's net profit for the June quarter rose 3.2% on year. Analysts had estimated the net profit at INR 5.37 billion. Sequentially, the net profit declined 6% from INR 5.63 billion in Jan-Mar.

The company's credit cost rose sharply to 1.9% in the June quarter from 1.4% a quarter ago and 1.5% a year ago. Analysts had expected the company's credit costs to rise due to the seasonal transition from the Jan-Mar to Apr-Jun quarter.

 

Total revenue from operations increased 18.7% year-on-year and 4.2% quarter-on-quarter to INR 44.19 billion. Of this, the company's interest income was INR 41.65 billion in the June quarter, up 15.3% on year and 3.7% on quarter.

 

The non-banking financial company's disbursements fell 18% sequentially but rose 1% on year to INR 128.08 billion. "While the overall disbursement growth was relatively subdued, tractor disbursements grew 21% on year," the company said in a release.

 

Analysts had also expected seasonal worsening of asset quality. The asset quality was within their provisional operational data for the June quarter. Stage-3 assets stood at 3.8% as of Jun. 30, slightly higher than 3.7% a quarter ago. Stage-2 assets were 5.85%, within the company's provisional range of 5.8-5.9%.

 

The company said its provision coverage on Stage 3 loans was 51.4% as of Jun. 30. The company reported impairment on financial instruments in the June quarter at INR 6.60 billion, up from INR 4.48 billion a year ago.

 

Its collection efficiency rose marginally to 95%, up from 94% in the year-ago period, indicating stability in customer repayments, the release said.

 

The company's net interest income for the June quarter, including dividend and other income, rose 18% on year and 6% sequentially, to INR 22.85 billion, according to the press release. A median of estimates had projected the June quarter figure at INR 20.70 billion.

 

The shadow bank reported a net interest income margin of 6.7% in the reporting quarter, up from 6.6% a year ago and 6.5% a quarter ago. Some analysts had expected the company's net interest margin to expand slightly, due to a decline in cost of funds, with a fixed-rate vehicle finance book. 

 

Mahindra & Mahindra Financial's assets under management grew to INR 1.22 trillion as on Jun 30, up around 15% on year. The company reported a capital adequacy ratio of 20.62% and a liquidity coverage ratio of 322% as on Jun 30. The company has a liquidity chest of over INR 101.00 billion, it said in a release. 

 

The company is focusing on reducing high-risk portfolios in its core wheels business, the release said. A key strategic priority is diversification beyond vehicle finance, it said. Analysts had said that more than 90% of the company's assets were in the vehicle finance business. "The non-vehicle finance portfolio continues to grow by 30% on year, further diversifying its asset base," the release said.

 

The company's asset book for the micro, small and medium enterprises segment grew 28% on year to INR 65.23 billion as of Jun. 30, the release said. The rise was due to secured lending, such as loan against property, which accounted for 44% of total assets in this segment, from 33% a year ago. Stage 3 assets in this segment were 1.4% as of Jun. 30. 

 

Shares of the company ended 1% higher at INR 265.55 on the National Stock Exchange Tuesday. The company reported the earnings during market hours.  End

 

Edited by Saji George Titus

 

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