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Mahindra & Mahindra Financial Services Limited (Mahindra Finance) recorded a 56.17% drop in standalone net profit to ₹448.33 crore for the quarter ending September 30, 2022 (Q2FY23) period compared to a profit of ₹1,022.90 crore in the same quarter last year. Sequentially, Q2 PAT soared by 101.11% from ₹222.92 crore in Q1 of FY23. The profitability in Q2FY23 was mainly in-line with estimates.
In its audit report, Mahindra Finance stated that the second quarter of the previous year witnessed a significant reversal of impairment provisions as a result of improvement in asset quality which had deteriorated during Q1 FY22 due to the second wave of Covid-19. This resulted in a PAT of ₹1,023 crore for Q2 FY22.
As of September 30, 2022, Mahindra Finance carried a total liquidity buffer of approximately ₹10,600 crore – covering more than 3.5 months’ obligations.
In Q2FY23, Net interest income stood at ₹1,540 crore up by 2% yoy, while total income stood at ₹2,609 crore higher by 3% yoy. Net interest margin (NIM) came in healthy at 7.5%.
Further, in Q2FY23, the company’s loan book increased by 9% to ₹73,817 crore compared to Q1FY23 aided by an increase in disbursements. Disbursement for the quarter at ₹11,824 crore was up 83% on yoy basis.
Also, Mahindra Finance stated that Gross stage 3 substantially improved to 6.7% from 8.0% last quarter (Q1 FY23), supported by focused collection initiatives, timely settlements, and macro tailwinds.
Mahindra Finance said, “We continue to maintain leadership position in financing of Tractor and Mahindra Auto segment. With evolving segment and customer mix, we expect to maintain quality growth. We are witnessing strong demand in the Tractor segment, aided by above average monsoon conditions and continued spending by government on rural projects. Increasing penetration in the used vehicles financing continues to be our focus area to help improve margins.”
Also, it added, “the company continues to invest in digitization, partnerships, and transformation projects.”
During the quarter and half year ended September 30, 2022, Mahindra Finance made a provision, considered as Exceptional Item, of Rs. 55 crore towards impairment of investment in its subsidiary in Sri Lanka, Mahindra Ideal Finance Limited based on assessment of the evolving economic crisis and its effect on currency devaluation.
On BSE, Mahindra Finance shares closed at ₹193.60 apiece up by 2.32%. The company’s market cap is around ₹23,919.86 crore.
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John Miller has been writing about science, gaming, and tech culture for over a decade. He’s a top-rated reviewer with extensive experience helping people find the best deals on tech and more.
