The credit cost of the company has increased sharply to 561 bps (annualized) in Q1FY2021 compared with 483 bps in preceding quarter and 379 bps in the corresponding quarter last year. The company has created additional provisions of Rs 664.5 crore in Q1FY2021 for covid 19.

The net interest margin (NIM), on calculated basis, of the company improved to 8.44% in Q1FY2021 compared with 8.21% in the corresponding quarter last year.

Income from Operations increased 10% to Rs 2992.39 crore during the quarter ended June 2020, compared to the corresponding previous year quarter. Other Income dipped 30% to Rs 76.30 crore. The total Income moved up 8% to Rs 3068.69 crore, while interest expenses increased 11% to Rs 1401.15 crore in the quarter ended June 2020.

The staff cost declined 37% to Rs 299.11 crore, while other operating expenses slipped 50% to Rs 119.89 crore.

The ensuing operating profit improved 44% to Rs 1248.54 crore in the quarter ended June 2020. Depreciation fell 9% to Rs 37.87 crore during the quarter under review. Provisions & write-off surged 40% to Rs 948.85 crore. PBT before EO increased 79% to Rs 261.82 crore.

The company has registered profit of Rs 228.54 crore from sale of 49% of the share capital in the AMC business to Manulife. The PBT after EO surged 234% to Rs 490.36 crore

After accounting for taxation of Rs 71.66 crore, minority interest of Rs 0.40 crore and profit from associate companies of Rs 13.42 crore, net profits increased 303% to Rs 431.72 crore in the quarter ended June 2020.

On a standalone basis, total Income increased 10% at Rs 2640.50 crore during the quarter ended June 2020, as against Rs 2394.00 crore in the corresponding period last year. The net profit improved 128% to Rs 155.80 crore during the quarter ended June 2020, as compared to Rs 68.40 crore during the corresponding period last year.

MMFSL currently has a network of 1324 offices. The company's customer base has touched 6.90 million customers at end June 2020.

The standalone Assets Under Management (AUM) increased 14% to Rs 81436 crore end June 2020 from Rs 71406 crore corresponding reporting date last year. The disbursements of Mahindra Finance has posted sharp decline of 67% to Rs 3489.2 crore in the quarter ended June 2020. The disbursements of the company on consolidated basis dipped 69% to Rs 3489.2 crore in the quarter ended June 2020.

Asset Quality

GNPA rose to 9.19% of total asset at end June 2020 from 8.44% a quarter ago. NNPA ratio declined to 5.72% on sequential basis from 5.98% a quarter ago. NPA coverage ratio improved to 40.10% at end June 2020 from 31.00% at end March 2019.

Almost 75% of the customers opting for moratorium on their EMIs had impacted the company's daily cash flows in the first quarter. We are 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 installments ahead of their due dates. During this quarter we have seen around 40% of moratorium availed customers repaying installments.

The Company maintains a very healthy capital adequacy and has adequate Capital and Financial Resources to run its business.

The Company's capital and debt position is strong and the ALM position is well balanced.

Mahindra Insurance Brokers (MIBL)

During the quarter ended June 2020, MIBL registered income at Rs 41.2 crore as against Rs 79.6 crore, registering a dip of 48% over the same period previous year. The Profit After Tax (PAT) registered was Rs 2.0 crore as against Rs 6.2 crore, registering a sharp decline of 68% over the same period previous year.

Mahindra Rural Housing Finance (MRHFL)

The disbursements of the company were nil in the quarter ended June 2020 as against Rs 497.6 crore during the same period previous year. MRHFL registered income at Rs 385.2 crore as against Rs 363.1 crore, registering a growth of 6% over the same period previous year. The Profit After Tax (PAT) registered a growth of 66% at Rs 47.7 crore as against Rs 28.8 crore for the same period previous year. The Company has considered an additional provision of Rs 187.7 crore (pre-tax) due to a management overlay in the current quarter for covering the contingencies that may arise due to the COVID – 19 pandemic.

The GNPA of the company rose to 15.50 end June 2020 from 11.06 a quarter ago, while the NNPA of the company moved up to 9.99 end June 2020 from 6.57 a quarter ago.

Mahindra Manulife Investment Management (MMIMPL)

During the quarter ended June 2020, MMIMPL earned total income of Rs 6.35 crore as compared to Rs 4.14 crore in the same period previous year. The company incurred a loss of Rs 5.42 crore compared to a loss of Rs 8.56 crore during the same period previous year. The Average Assets under Management (AUM) of MMIMPL for the quarter ended June 2020 was Rs 4,708 crore across 13 schemes which showed a decline of 5% over the same period previous year. Of these assets, the Company managed Rs 1,620 crore of average equity assets in the quarter ended June 2020 compared to Rs 1,513 crore in the same quarter last year.

Mahindra Manulife Trustee (MMTPL)

During the quarter ended June 2020, MMTPL earned total income of Rs 0.05 crore maintaining same level as in the corresponding previous year to Rs 0.05 crore. The company incurred a loss of Rs 0.07 crore compared to a loss of Rs 0.04 crore during the same period previous year.

Mahindra Finance USA, LLC (MFUSA)

During the quarter ended June 2020, MFUSA registered income at USD 16.4 Million as against USD 17.5 Million during the corresponding quarter last year, registering a decline of 6% over the same period previous year. The Profit Before Tax (PBT) during the quarter ended June 2020, registered was USD 5.7 Million as against USD 4.9 Million during the corresponding quarter last year, registering a growth of 16% over the same period previous year. The Profit After Tax (PAT) during the quarter ended June 2020, registered was USD 4.3 Million as against USD 3.7 Million during the corresponding quarter last year, registering a growth of 16% over the same period previous year.

Ideal Finance (IFL)

During the quarter ended June 2020, IFL registered income at LKR 216.0 Million as against LKR 219.9 Million during the corresponding quarter last year, registering a decline of 2% over the same period previous year. The Profit Before Tax (PBT) during the quarter ended June 2020, registered was LKR 37.6 Million as against LKR 34.9 Million during the corresponding quarter last year, registering a growth of 8% over the same period previous year. The Profit After Tax (PAT) during the quarter ended June 2020, registered was LKR 25.1 Million as against LKR 19.1 Million during the corresponding quarter last year, registering a growth of 31% over the same period previous year.

Book value of the company on standalone basis stood at Rs 186.7 per share and adjusted book value stood at Rs 126.4 per share end June 2020. Book value of the company on consolidated basis stood at Rs 201.0 per share and adjusted book value stood at Rs 128.1 per share end June 2020.

Financial Performance FY2020:

For the year ended March 2020 (FY2020), MMFSL reported 15% rise in the Income from Operations to Rs 11457.61 crore, against the corresponding previous year period. Other Income increased 15% to Rs 584.74 crore. As a result, the total Income grew 15% to Rs 12042.35 crore. Interest expenses moved up 22% to Rs 5390.56 crore, while the operating expenses increased 7% to Rs 2583.91 crore leading the operating profits to rise 12% to Rs 4067.88 crore. Depreciation increased 94% to Rs 146.87 crore, while Provisions & write-off zoomed 223% to Rs 2318.98 crore. PBT fell 44% to Rs 1602.03 crore. The effective tax rates stood at 32.2% in FY2020 compared with 34.3% in FY2019. Net Profit declined 41% to Rs 1075.15 crore in FY2020 over FY2019.