Mahindra and Mahindra Financial Services has reported more than two-fold jump in standalone net profit to ₹156 crore in the quarter ending June helped by cost rationalisation measures and lower funding cost. It had reported a profit after tax of ₹68 crore in the same quarter of last year.
On a consolidated basis, the lender reported a profit after tax of ₹432 crore during the quarter as against ₹108 crore last year. "The increase in profit was due to cost rationalisation, reduction in overall cost of borrowing and also rise in NPAs was not high," Mahindra Finance vice-chairman and managing director Ramesh Iyer said.
He said April and May were no-activity months and the entire disbursements happened in June. The total value of assets financed for the quarter ended June stood at ₹3,489 crore as against ₹10,598.3 crore last year in the same period.
The company expects an increase in demand and financing for pre-owned vehicles, agri machinery (tractors) and small vehicles going ahead. "We have seen a revival in tractor demand and sales of three-wheeler goods carriers. We feel that rural sentiments are turning positive as monsoon is on time and widespread, excellent harvest and good support price and due to various government initiatives," Iyer said.
The company said almost 75% of customers opting for moratorium on their EMIs had impacted the company's daily cash flows in the first quarter. It, however, is now witnessing collections moving at a much faster pace from mid-June 2020 onwards, with many of the customers who have availed moratorium, paying their instalments ahead of their due dates.
"During this quarter we have seen around 40% of moratorium availed customers repaying instalments," it said.
The gross NPA (stage 3) stood at 9.19% as against 8.17%. Net NPAs (stage 3) was at 5.72%, against 6.27% last year. The stage 3 provisioning coverage ratio stood at 40.1%, against 24.9% during the corresponding period last year. The standalone assets under management (AUM) stood at ₹81,436 crore as against ₹71,406 crore last year, registering a growth of 14%.
The company's board on Saturday approved a proposal to raise up to ₹3,500 crore through rights issue.
This story has been published from a wire agency feed without modifications to the text.
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