Total Income was at Rs. 2,543 crore for the quarter, a decline of 1% YoY. Net Interest Income at Rs. 1,580 crore increased by 14% YoY reflecting widening of spread.

Pre-provisioning operating profit increased by 4% YoY to Rs 1,062 crore in Q3 FY22.

The company wrote back provisions worth Rs 148 crore during the quarter. Provisions and write-offs in the corresponding quarter last fiscal amounted to Rs 1,387 crore.

The gross stage-3 showed steady recovery from 12.7% in September to 11.3% in December, thereby releasing Rs. 437 crore from the stage-3 provisions. The company expects further improvements in quarters to come. Stage-2 also showed a similar declining trend sequentially from 19.7% to 17.8% at December end.

As of December 2021, the provision coverage for stage-3 assets was at 53.2%. Consequently, the net stage-3 was at 5.6% as on 31 December 2021. By year end, the company aims to bring this ratio below 4%.

As of 31 December 2021, the restructured loans stood at Rs 4,378 crore. The company carried a cumulative provision of Rs 873 crore (19.9% coverage) on such contracts as of 31 December 2021. The cumulative management overlay as on 31 December 2021 stood at Rs 2,038 crore.

The gross NPA as per IRACP norms was Rs 10,897 crore as on 31 December 2021.

The management believes that enhanced collection and legal efforts, including repossessions and settlements should help reduce gross NPA (IRACP) by March-22 end. The company may require to make an additional provision in the range of Rs 500 crore to Rs 1,500 crore in Q4 FY22 in order to bring the net NPA under IRACP norms below 6%.

With regard to operations, the company said that Q3 witnessed some normalcy returning. Mobility improved further and there was better visibility on cash flows - both farm & infra and demand for vehicles.

For the Q3 (Oct-Dec 2021), total disbursement stood at Rs. 8,032 Crore, a 28% growth year-on-year (and a 24% growth sequentially), while collection efficiency during the quarter stands at 95%, as compared to Q3 of last year at 88%.

In the tractor financing segment, the company has witnessed a rise in market share by expanding its presence.

“With the millennium mindset changing, consumers want to be asset-light, thereby making our leasing and subscription business, Quiklyz, the new popular way to own the vehicle,” the company said.

On a consolidated basis, the company reported a net profit of Rs 992 crore in Q3 FY22 as against a net loss of Rs 223 crore in Q3 FY21. Total income during the quarter remained flat at Rs 2,986 crore.

Mahindra & Mahindra Financial Services (Mahindra Finance), part of the Mahindra Group, is a non-banking finance company. The company is a vehicle and tractor financier, provides loans to SMEs and also offers fixed deposits and is focused on the rural and semi-urban sector.

The scrip slumped 4.74% to currently trade at Rs 160.75 on the BSE.