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Mahindra and Mahindra Financial Services
(MMFSL), on a consolidated basis, has reported sharp rebound in the net profit to Rs 239.26 crore in the quarter ended June 2022 (Q1FY2023) compared with the
net loss of Rs 1573.72 crore in Q1FY2022.
The company has reported
12% rise in the Income from Operations to Rs 2765.92 crore, against the
corresponding previous year period. Other Income increased 46% to Rs 148.03 crore.
As a result, the total Income grew 14% to Rs 2913.95 crore.
Interest expenses declined
-9% to Rs 1052.12 crore, while the operating expenses increased 50% to Rs 802.92
crore leading the operating profits to increase 20% to Rs 1058.91 crore. Depreciation
increased 32% to Rs 43.37 crore, while Provisions & write-off slipped -76% to
Rs 708.80 crore.
PBT increased to Rs 306.74
crore in Q1FY2023 from pre tax losses of Rs 2158.24 crore in Q1FY2022. The
effective tax rates stood at 25.6% in FY2022 compared with 26.3% in FY2021. Net
Profit rebounded to Rs 239.26 crore in Q1FY2023.
Book
value of the company on
standalone basis stood at Rs 127.6 per share and adjusted book value stood at
Rs 106.3 per share end June 2022. Book value of the company on consolidated
basis stood at Rs 138.2 per share and adjusted book value stood at Rs 109.4 per
share end June 2022.
Business
highlights:
Loan Book increased sequentially by
4.2% to Rs 67693 crore with improvement in disbursements. Disbursements at Rs 9472
crore was higher by 145% YoY
Net Interest Margins for the quarter
were healthy at 8.2%; Net Interest Income at Rs 1567 Crore increased by 34%
YoY, on the back of low-cost borrowings during the trailing 12-month period.
Profit after Tax (PAT) was at Rs 223
crore for the quarter as against Loss after Tax of Rs 1529 crore during Q1
FY22, which was impacted due to second wave of Covid-19 pandemic.
Gross Stage 3 marginally increased
from 7.7% in March to 8.0% in June despite seasonal volatility, powered by
focused collection initiatives and timely repossessions. This is the lowest GS3
level witnessed during the first quarter under IND-AS reporting.
As of June 2022, the provision
coverage for Stage 3 assets was healthy at 58.1%, well ahead of the model
provisions. In effect, the Net Stage 3 was at 3.5% as on 30 June 2022.
At the end of first quarter, the
restructured loans stood at Rs 3,591 crore a decline from Rs 4019 crore as of
31st March 2022.
The Company has initiated focused
efforts to contain NPAs based on IRACP norms scheduled to be effective from Oct
2022.
The Company’s Capital Adequacy stands
at a healthy 25.9%. Provision coverage on Stage 3 loans maintained at 58.1%.
As of June end, the Company carried a
total liquidity buffer of approximately Rs 8,700 crore - covering 3 months’ obligations.
Commenting on the Q1 performance,
Ramesh Iyer, Vice Chairman and Managing Director highlighted “We have had a
reasonable start to the year. The company has been able to report a
satisfactory top line and bottom-line performance on the back of growth in
asset book and control on asset quality. We look forward to this momentum to
continue in subsequent quarters. The first quarter of last year was impacted
due to second wave of Covid-19. As the year progressed, the asset quality
improved and the performance normalized. To that end, the current quarter
performance is not comparable to that of previous year.”
Disbursement trend continues to indicate
demand momentum. Contact intensive businesses have been doing well with
increase in tourism and higher utilization of vehicles. We are witnessing improved
cash flows from the segment of customers we serve resulting in highest ever disbursement
and Collection Efficiency in any first quarter.
In the Tractor and Mahindra UV
(utility vehicles) financing segments, we continue to maintain leadership
position. Customised offers at product and geography level are being rolled out
to factor local nuances. Pre-owned vehicle financing continues to be a
significant focus area which shall assist in improvement in growth along with
margins.
The SME business registered a
sequential growth of approximately 30% and its asset book is now approximately
Rs 2800 crore. This business will continue to further scale up in coming quarters.
Digital initiatives of Leasing and
Digi Finco are gaining momentum and are receiving satisfactory response from
target customers.
Subsidiaries
Mahindra
Rural Housing Finance (MRHFL)
During Q1FY2023, MRHFL
registered income at Rs 329 crore as against Rs 334 crore during the
corresponding quarter last year, a decline of 1.5% over the same period
previous year. MRHFL registered a PAT of Rs 2.4 crore for the current quarter,
as against Net Loss of Rs 65.4 crore during the corresponding quarter last
year. MRHFL has cumulative management overlay of Rs 51.7 crore as on June 30,
2022.
Mahindra
Insurance Brokers (MIBL)
During Q1FY2023, MIBL
registered income at Rs 89 crore as against Rs 60 crore during the
corresponding quarter last year, a growth of 48% over the same period previous
year. The Profit After Tax (PAT) registered was Rs 2.2 crore during Q1FY2023,
as against Rs 3.5 crore during the corresponding quarter last year, a de-growth
of 36% over the same period previous year.
Mahindra
Manulife Investment Management (MMIMPL)
During Q1FY2023, MMIMPL
earned total income of Rs 7.9 crore as compared to Rs 8.7 crore in the same
period previous year. MMIMPL incurred a loss of Rs 10.8 crore compared to a
loss of Rs 5.1 crore during the same period of the previous year.
The Average Assets under
Management (AUM) of MMIMPL as on June 30, 2022, stood at Rs 9,223 crore across
19 schemes, an increase of 63% over the same period previous year. Of these
assets, the Company managed Rs 6,330 crore of average equity assets in the
quarter year ended June 30, 2022, a growth of 124% compared to Rs 2,832 crore
in the same period last year.
Mahindra
Manulife Trustee (MMTPL)
During Q1FY2023, MMTPL
earned total income of Rs 0.2 crore compared to Rs 0.1
crore during the same period previous year. MMTPL made a profit of Rs 0.1 crore
during the current quarter compared to a breakeven (no profit / no loss)
position during the same period of the previous year.
Mahindra Ideal
Finance (MIFL)
During Q1FY2023, MIFL registered
income at LKR 396.5 Million as against LKR 265.3 Million during the
corresponding quarter last year, registering a growth of 49% over the same
period previous year. The Profit after Tax (PAT) during Q1FY2023 was LKR 14.4
Million as against LKR 58.9 Million during the corresponding quarter last year,
a decline of 76% over the same period previous year.
MIFL and the Company are closely
tracking the macro-economic turbulence in Sri Lanka. Necessary steps are being
taken to safeguard the business, asset quality and ensure adequate liquidity
Mahindra Finance USA
(MFUSA)
During Q1FY2023,
MFUSA registered income at USD 14.6 Million as against USD 14.7 Million during
the corresponding quarter last year, registering a marginal decline of 1% over
the same period previous year. The Profit after Tax (PAT) during Q1FY2023,
registered was USD 4.5 Million as against USD 5.2 Million during the corresponding
quarter last year, registering a decline of 13% over the same period previous
year.
Financial Performance
FY2022:
For the year ended June 2021
(FY2022), MMFSL reported -7% decline in the Income from Operations to Rs
10858.08 crore. Other Income increased 16% to Rs 542.43 crore. The total Income
declined -6% to Rs 11400.51 crore. Interest expenses fell -17% to Rs 4417.37
crore, while the operating expenses increased 30% to Rs 2656.94 crore leading
the operating profits to decline -10% to Rs 4326.20 crore. Depreciation
increased 1% to Rs 151.99 crore, while Provisions & write-off fell -33% to
Rs 2690.38 crore. PBT jumped 123% to Rs 1483.83 crore. The effective tax rates
stood at 26.9% in FY2022 compared with 23.1% in FY2021. Net Profit increased 47%
to Rs 1136.87 crore in FY2022 over FY2021.
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Mahindra & Mahindra
Financial Services: Consolidated Results
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Particulars
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2206 (3)
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2106 (3)
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Var %
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2203 (12)
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2103 (12)
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Var %
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Income from
operations
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2765.92
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2465.22
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12
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10858.08
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11703.79
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-7
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Other Income
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148.03
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101.62
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46
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542.43
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466.71
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16
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Total Income
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2913.95
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2566.84
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14
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11400.51
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12170.50
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-6
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Interest Expenses
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1052.12
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1151.08
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-9
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4417.37
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5307.57
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-17
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Operating Expense
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802.92
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535.87
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50
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2656.94
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2047.62
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30
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Gross Profits
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1058.91
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879.89
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20
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4326.20
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4815.31
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-10
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Depreciation /
Amortization
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43.37
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32.76
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32
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151.99
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150.51
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1
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Provisions and
write off
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708.80
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3005.37
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-76
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2690.38
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3998.74
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-33
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PBT before EO
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306.74
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-2158.24
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LP
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1483.83
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666.06
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123
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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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20.57
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228.54
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-91
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PBT after EO
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306.74
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-2158.24
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-114
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1504.40
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894.60
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68
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Tax Expense
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78.58
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-567.95
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-114
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399.08
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153.86
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159
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Net Profit
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228.16
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-1590.29
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-114
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1105.32
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740.74
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49
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Minority Interest
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0.60
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0.32
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88
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13.47
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7.07
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91
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P&L of Associate
Co.
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11.70
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16.89
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-31
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45.02
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39.54
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14
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PAT
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239.26
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-1573.72
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LP
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1136.87
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773.21
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47
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EPS (Rs)*
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7.8
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-51.1
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9.1
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4.7
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Adj BV (Rs)
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109.4
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67.7
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110.1
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102.6
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*Annualized on
current equity of Rs 246.60 core excluding EO and relevant tax. Face Value:
Rs 2,
LP: Loss to
profit, PL: Profit to loss, Figures in Rs crore
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Source:
Capitaline Corporate Database
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