Mahindra Finance Reports 48% YoY Decline In Q2 PAT To Rs 235 Cr

Mahindra & Mahindra Financial Services (Mahindra Finance), a prominent non-banking finance company within the Mahindra Group, reported a profit before tax of Rs 316.28 crore for the quarter ending on 30 September 2023. This figure represented a 48.21 per cent decrease compared to the Rs 610.71 crore reported in Q2 FY23. 

On the positive side, net interest income (NII) increased by 9 per cent year-on-year, reaching Rs 1,674 crore. However, the net interest margin (NIM) for the quarter was at 6.5 per cent, influenced by higher borrowing rates and a shift in the portfolio mix favoring customers with better credit quality.

During the quarter, disbursements amounted to Rs 13,315 crore, marking a 13 per cent year-on-year growth. Collection efficiency remained robust at 96%, showing improvement over Q1 FY24 and a slight reduction compared to Q2 FY23. The loan book also expanded by 27 per cent year-on-year, reaching Rs 93,723 crore by the end of September 2023.

Gross Stage 3 (GS-3) remained stable at 4.3 per cent in September 2023, down from 6.7 per cent in Q2 FY23 but consistent with the level observed at the end of June.

The company maintained a capital adequacy of 18.7 per cent, with a prudent provision coverage of 61.2 per cent on Stage 3 loans. Mahindra Finance reported a total liquidity buffer of approximately Rs. 8,300 crore, covering slightly over 2.5 months' gross obligations as of the end of September.

On a consolidated basis, the company's net profit declined by 41.62 per cent to Rs 287.24 crore, while total income increased by 27.54 per cent to Rs 3,863.47 crore in Q2 FY24 compared to Q2 FY23.

Mahindra & Mahindra Financial Services specialises in serving the rural and semi-urban sectors, catering to over 8.4 million customers and managing an AUM of over USD 11 billion. The company provides financial services for vehicles and tractors, offers loans to SMEs, and provides fixed deposits.