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Mahindra and Mahindra
Financial Services (MMFSL), on a consolidated basis, has reported 6% decline in
the net profit to Rs 622.56 crore in the quarter ended December 2023 (Q3FY2024)
The credit cost for the
company declined to 143 bps (annualized) in Q3FY2024 compared with 276 bps in
preceding quarter, but increased from 94 bps in the corresponding quarter last
year. The net interest margin (NIM), on calculated basis, of the company declined
to 7.31% in Q3FY2024 compared with 8.37% in the corresponding quarter last
year.
Income from Operations
increased 18% to Rs 3692.70 crore during the quarter ended December 2023,
compared to the corresponding previous year quarter. Other Income jumped 103% to
Rs 444.30 crore. The total Income moved up 23% to Rs 4137.00 crore, while
interest expenses increased 31% to Rs 1797.76 crore in the quarter ended
December 2023.
The staff cost moved up 6%
to Rs 566.83 crore, while other operating expenses increased 67% to Rs 542.70 crore.
The ensuing operating profit improved 10% to Rs 1229.71 crore in the quarter
ended December 2023.
Depreciation rose 10% to
Rs 69.23 crore during the quarter under review. Provisions & write-off surged
90% to Rs 346.85 crore. The profit before tax declined -7% to Rs 813.63 crore. After
accounting for taxation of Rs 203.43 crore, net profits fell -6% to Rs 622.56 crore
in the quarter ended December 2023.
On a standalone basis,
total Income increased 21% at Rs 3454 crore during the quarter ended December
2023, as against Rs 2863 crore in the corresponding period last year.
The net profit declined
12% to Rs 553 crore during the quarter ended December 2023, as compared to Rs 629
crore during the corresponding period last year.
Book value
of the company on standalone basis stood at Rs 142.0 per share and adjusted book value stood at
Rs 129.8 per share end December 2023.
Book value
of the company on consolidated basis stood at Rs 155.9 per share and adjusted book value stood at
Rs 139.3 per share end December 2023.
Asset Quality
GNPA dipped to 3.97% of
total asset at end December 2023 from 4.29% a quarter ago. NNPA ratio also
declined to 1.52% on sequential basis from 1.71% a quarter ago. NPA coverage
ratio improved to 62.70% at end December 2023 from 61.20% at end December 2021.
Business
highlights and asset quality
The
quarter witnessed broad-based growth with a recorded disbursement of Rs 15436 crore.
Year-to-date (YTD) disbursement until December 2023 reached Rs 40916 crore,
indicating a 14% yoy growth. This positive trend in loan growth contributed to
the expansion of business assets, now standing at Rs 97048 crore. This marks a
25% growth since December 2022.
The
collection efficiency for the quarter is recorded at 95%, similar to levels
observed in Q3FY23 and marginal reduction over Q2 FY24. During the quarter, the
Company has seen further improvement in its asset quality, with stage 3 assets
at 4.0% (vs. 4.3% as of September 2023 and 5.9% as of December 2022). Stage 2
at around 6% (vs. 5.8% as of September 2023 and 8.4% as of December 2022).
To
diversify within the Vehicle Finance book, the Company has been investing in
used vehicle finance. The company already has 2 partnerships that are steadily
growing, namely, ‘car&bike’ and ‘CarDekho’. The disbursements for used
vehicles finance have grown 19% YTD until December 2023. The used vehicle
finance share in disbursements now stands at 17% YTD December 2023, versus 16%
for the same period last year.
Partnerships
will play an important role in achieving Company’s vision of providing
financial solutions to Emerging India. As on date, the Company has already tied
up with 2 large commercial banks, namely SBI and Bank of Baroda and recently
with Lendingkart, an NBFC. It also has tie-ups with IPPB (India Post Payments
Bank) and CSC (Common Service Centres by Ministry of Electronics and
Information Technology) for lead generation. These partnerships will allow the
Company to expand its distribution and maximise the fee income potential over
the next 2-3 years.
Amidst
sustained profitable growth and a strong balance sheet, our capital adequacy
remains robust, currently standing at 18.3%. Additionally, the company hold a
comfortable liquidity position, with a liquidity chest of over 2.5 months.
Subsidiaries:
Mahindra Rural Housing Finance (MRHFL)
During
Q3FY2024, MRHFL registered income of Rs 311 crore as against Rs 338 crore
during Q3FY2023, a decline of 8% over the same period previous year. The Profit
After Tax (PAT) registered was Rs 13.4 crore during Q3FY2024, as against Rs 14.2
crore during Q3FY2023 a decline of 5.3% over the same period previous year.
Mahindra Insurance Brokers (MIBL)
During
Q3FY2024, MIBL registered income of Rs 330.8 crore as against Rs 123.0 crore
during Q3FY2023, a growth of 169% over the same period previous year. The
Profit After Tax (PAT) registered was Rs 43.5 crore during Q3FY2024, as against
Rs 13.4 crore during Q3FY2023 a growth of 225% over the same period previous
year.
Mahindra Manulife Investment Management (MMIMPL)
During
Q3FY2024, MMIMPL registered income of Rs 16.6 crore as against Rs 12.0 crore
during Q3FY2023, a growth of 38% over the same period previous year. The
Company incurred a loss of Rs 6.3 crore during Q3FY2024, as against loss of Rs 7.2
crore during Q3FY2023, a decline in loss by 14% over the same period previous
year.
The
Average Assets under Management (AUM) of MMIMPL for Q3FY2024, was Rs 15,321 crore
across 21 schemes, an increase of 65% over the same period previous year. Of
these assets, the Company managed Rs 13,554 crore of average equity assets in Q3FY2024,
a growth of 72% compared to 7,865 crore in the same period last year.
Mahindra Manulife Trustee (MMTPL)
During
Q3FY2024, MMTPL registered income of Rs 0.3 crore as against Rs 0.2 crore
during Q3FY2023, a growth of 72% over the same period previous year. The Profit
After Tax (PAT) registered was Rs 0.1 crore during Q3FY2024, as against no
profit / no loss position during the corresponding quarter of last year.
Mahindra Ideal Finance (MIFL)
During
Q3FY2024, MIFL registered income of LKR 569 Million as against LKR 491 Million
during Q3FY2023, registering a growth of 16% over the same period previous
year. The Profit After Tax (PAT) during Q3FY2024, was LKR 24 Million as against
LKR 14 Million during Q3FY2023, a growth of 69% over the same period previous
year.
Mahindra Finance USA, LLC (MFUSA)
During
Q3FY2024, MFUSA registered income at US$ 20.6
Million as against US$ 16.8 Million during Q3FY2023, registering
a growth of 22% over the same period previous year. The Profit After Tax (PAT)
during Q3FY2024, registered was US$ 3.9 Million as against US$ 2.7 Million
during Q3FY2023, registering a growth of 44% over the same period
previous year.
Financial Performance
9MFY2024:
For the nine months ended
December 2023 (9MFY2024), MMFSL reported 21% rise in the Income from Operations
to Rs 10546.55 crore, against the corresponding previous year period. Other
Income increased 81% to Rs 1090.83 crore. As a result, the total Income grew 24%
to Rs 11637.38 crore. Interest expenses moved up 41% to Rs 5098.32 crore, while
the operating expenses increased 20% to Rs 3098.50 crore. The operating profits
rose 9% to Rs 3440.56 crore. Depreciation increased 26% to Rs 202.67 crore,
while provisions & write-off increased 44% to Rs 1586.11 crore. PBT fell 13%
to Rs 1651.78 crore. The effective tax rates stood at 25.4% in 9MFY2024
compared with 25.8% in 9MFY2023. Net Profit declined 9% to Rs 1262.34 crore in
9MFY2024 over 9MFY2023.
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Mahindra &
Mahindra Financial Services: Consolidated Results
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Particulars
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2312 (3)
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2212 (3)
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Var %
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2312 (9)
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2212 (9)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Income from
operations
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3692.70
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3133.54
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18
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10546.55
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8747.78
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21
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12029.51
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10858.08
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11
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Other Income
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444.30
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219.28
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103
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1090.83
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604.33
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81
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858.95
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542.43
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58
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Total Income
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4137.00
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3352.82
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23
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11637.38
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9352.11
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24
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12888.46
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11400.51
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13
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Interest Expenses
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1797.76
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1372.97
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31
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5098.32
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3616.90
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41
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5094.30
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4417.37
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15
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Operating Expense
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1109.53
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858.52
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29
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3098.50
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2580.66
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20
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3569.11
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2656.94
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34
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Gross Profits
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1229.71
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1121.33
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10
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3440.56
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3154.55
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9
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4225.05
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4326.20
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-2
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Depreciation /
Amortization
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69.23
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63.04
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10
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202.67
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160.98
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26
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225.96
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151.99
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49
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Provisions and
write off
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346.85
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182.10
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90
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1586.11
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1098.54
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44
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1182.59
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2690.38
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-56
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PBT before EO
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813.63
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876.19
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-7
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1651.78
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1895.03
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-13
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2816.50
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1483.83
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90
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Extra ordinary
item (EO)
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0.00
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0.00
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-
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0.00
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-56.06
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-
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-56.06
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20.57
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-
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PBT after EO
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813.63
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876.19
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-7
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1651.78
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1838.97
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-10
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2760.44
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1504.40
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83
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Tax Expense
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203.43
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219.16
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-7
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420.04
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473.59
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-11
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732.56
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399.08
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84
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Net Profit
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610.20
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657.03
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-7
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1231.74
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1365.38
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-10
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2027.88
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1105.32
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83
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Minority Interest
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0.39
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2.95
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-87
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10.07
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5.21
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93
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-1.20
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13.47
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LP
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P&L of
Assosiate Co.
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12.75
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7.35
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73
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40.67
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30.90
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32
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43.32
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45.02
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-4
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PAT
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622.56
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661.43
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-6
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1262.34
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1391.07
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-9
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2072.40
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1136.87
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82
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EPS (Rs)*
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20.2
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21.4
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13.6
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15.5
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17.1
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9.1
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Adj BV (Rs)
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139.3
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120.4
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139.3
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120.4
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131.7
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110.1
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*Annualized on
current equity of Rs 246.86 core excluding EO and relvant tax. Face Value: Rs
2, Figures in Rs crore
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Source:
Capitaline Corporate Database
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