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Mahindra and Mahindra Financial Services
(MMFSL), on a consolidated basis, has reported 33% yoy dip in the net profit to
Rs 661.43 crore in the quarter ended December 2022 (Q3FY2023), while net profit
has increased on sequential basis from Rs 490.38 crore in Q2FY2023.
Third quarter of the
previous year continued with significant reversal of impairment provisions as a
result of improvement in asset quality which had deteriorated during Q1 FY22
due to second wave of Covid-19. This resulted in a PAT of Rs 894 crore for Q3
FY22.
With the improved collection performance,
the company has improved asset quality and margins. The credit cost also
declined supporting the earnings of the company in Q3FY2023.
The credit cost for the company dipped to 94
bps (annualized) in Q3FY2023 compared with 113 bps in preceding quarter, while
credit cost was negative (-) 81 bps in the corresponding quarter last year.
The net interest margin (NIM), on
calculated basis, of the company improved to 8.37% in Q3FY2023 compared with 8.21%
in Q2FY2023, while declined from 10% in Q3FY22.
Income from Operations increased 10% to Rs 3133.54
crore during the quarter ended December 2022, compared to the corresponding
previous year quarter. Other Income jumped 57% to Rs 219.28 crore. The total
Income moved up 12% to Rs 3352.82 crore, while interest expenses increased 28% to
Rs 1372.97 crore in the quarter ended December 2022.
The staff cost moved up 29% to Rs 534.26 crore,
while other operating expenses increased 20% to Rs 324.26 crore. The ensuing
operating profit declined 9% to Rs 1121.33 crore in the quarter ended December
2022.
Depreciation rose 78% to Rs 63.04 crore
during the quarter under review. Provisions & write-off stood at Rs 182.10 crore
in Q3FY2023 against write off of Rs 129.7 crore in Q3FY2022.
The profit before tax declined 34% to Rs 876.19
crore. After accounting for taxation of Rs 219.16 crore, net profits declined 33%
to Rs 661.43 crore in the quarter ended December 2022.
Business highlights:
Loan Book increased by
21% to Rs 77,344 crore compared to Q3FY22. Disbursement for the quarter at Rs 14,467
crore was up 80% on YoY basis.
Net Interest Margin for
the quarter was at 7.4%; Net Interest Income (NII) at Rs 1,650 crore was up 7%
YoY.
The Company’s Capital
Adequacy stood at a healthy 23.4%.
As of December end, the
Company carried a total liquidity buffer of approximately Rs 10,800 crore -
covering more than 3 months’ obligations.
During 9MFY2023, the
Company has made a provision, considered as Exceptional Item, of Rs 56 crore
towards impairment of assets pertaining to its subsidiary in Sri Lanka,
Mahindra Ideal Finance (MIFL) based on assessment of the evolving economic
crisis and its effect on currency devaluation.
During the
corresponding period last year, the Company increased its shareholding in MIFL
from 38.2% to 58.2%. This stake increase had resulted in revaluation of its
existing equity stake in MIFL, which led to a one-time revaluation gain of Rs 21
crore, which is shown as Exceptional Item in 9MFY22 consolidated financials.
The leadership position
of the company was further strengthened in the financing of Tractor, Mahindra
Auto & non-Mahindra segments with improvement in market shares during the
current quarter. Increasing penetration in the used vehicles financing
continues to be focus area to help improve margins.
Improved rural cash-flows during the quarter
supported demand sentiments. SME asset book which is over Rs 4,000 crore has
grown 10% sequentially and contributes 5% of the Business Assets aided by
disbursement towards supply-chain funding. Leasing business Quiklyz recently
signed MOUs with five last mile mobility players to deliver 1000 electric
3-wheelers, opening up newer opportunities in EV leasing.
The YTD disbursement of
Rs 35,764 crore registered a YoY growth of 95%. This led to a asset book of Rs 77,344
crore, a growth of 21% YoY and 5% sequentially. During Q3, the Company was able
to pass on the increase in borrowing costs, which improved yields.
The Collection War Room
set up by the Company continued to focus on early bucket resolutions and use of
legal tool-kits for enhanced outcomes. Collection Efficiency for the quarter
stood at 95%, similar to the third quarter of previous year. Consequently, the
asset quality improved during the quarter with Stage 3 and Stage 2 assets at
5.9% (vs. 6.7% in Q2FY23) and 8.4% (vs. 9.7% in Q2FY23) respectively.
Continued & Steady
improvement in asset quality – gross stage 3 improves to 5.9% (6.7% in Q2 FY23)
and gross stage 2 improves to 8.4% (9.7% in Q2 FY23). Provision coverage on
Stage 3 loans was maintained at 59.0%. Net stage 3 assets declined
to 2.52% on sequential basis from 2.91% a quarter ago.
The gap between IRACP
NPA and Gross Stage 3 (as on 31 December 2022) stands at Rs 1277 crore. We
expect this gap to be range-bound and are confident of no additional
provisioning requirement on account of IRACP.
The Company continues
to invest in various technology, digital & process initiatives as part of
its transformation project.
Long-term debt rating
has been upgraded by CRISIL to ‘CRISIL AAA/ Stable’ reaffirming continued
effort towards improving asset quality and stable resource profile.
Subsidiaries
Mahindra Rural
Housing Finance (MRHFL)
During Q3FY2023, MRHFL
registered income at Rs 338.0 crore as against Rs 352.6 crore during the
corresponding quarter last year, a decline of 4% over the same period previous
year. The Profit after Tax (PAT) registered was Rs 14.2 crore during Q3FY2023,
as against Rs 66.9 crore during the corresponding quarter last year.
Mahindra Insurance
Brokers (MIBL)
During Q3FY2023, MIBL
registered income at Rs 123.0 crore as against Rs 96.9 crore during the
corresponding quarter last year, a growth of 27% over the same period previous
year. The Profit After Tax (PAT) registered was Rs 13.4 crore during Q3FY2023,
as against Rs 18.1 crore during the corresponding quarter last year, a
de-growth of 26% over the same period previous year.
Mahindra Manulife
Investment Management (MMIMPL)
During Q3FY2023, MMIMPL
earned total income of Rs 12 crore as compared to Rs 8.5 crore in the same
period previous year. MMIMPL incurred a loss of Rs 7.2 crore compared to a loss
of Rs 9 crore during the same period previous year.
The Average Assets
under Management (AUM) of MMIMPL for Q3FY2023, are Rs 9,277 crore across 20
schemes, an increase of 17% over the same period previous year. Of these
assets, the Company managed Rs 7,865 crore of average equity assets in Q3FY2023,
a growth of 62% compared to Rs 4,841 crore in the same period last year.
Mahindra Manulife
Trustee (MMTPL)
During Q3FY2023, MMTPL
earned total income of Rs 0.2 Crore maintaining the same level as in the
corresponding previous year. MMTPL was at a no profit / no loss position during
the current year quarter compared to a profit of Rs 0.1 Crore during the same
period previous year.
Mahindra Ideal
Finance (MIFL)
During Q3FY2023, MIFL
registered income of LKR 491.1 Million as against LKR 344.1 Million during the
corresponding quarter last year, registering a growth of 43% over the same
period previous year. The Profit after Tax (PAT) during Q3FY2023, was LKR 14.1
Million as against LKR 76.6 Million during the corresponding quarter last year,
a decline of 82% over the same period previous year.
Mahindra Finance
USA, LLC (MFUSA)
During
Q3FY2023, MFUSA registered income at USD 16.8 Million as against USD 14.2
Million during the corresponding quarter last year, registering an increase of
18% over the same period previous year. The Profit after Tax (PAT) during Q3FY2023,
registered was USD 2.7 Million as against USD 4.1 Million during the
corresponding quarter last year, registering a decline of 34% over the same
period previous year.
Financial Performance 9MFY2023:
For the nine months ended December 2022
(9MFY2023), MMFSL reported 8% rise in the Income from Operations to Rs 8747.78 crore,
against the corresponding previous year period. Other Income increased 61% to
Rs 604.33 crore. As a result, the total Income grew 10% to Rs 9352.11 crore. Interest
expenses moved up 8% to Rs 3616.90 crore, while the operating expenses
increased 39% to Rs 2580.66 crore leading the operating profits to decline 4% to
Rs 3154.55 crore. Depreciation increased 57% to Rs 160.98 crore, while provisions
& write-off dipped 57% to Rs 1098.54 crore. PBT jumped 205% to Rs 1895.03 crore.
The effective tax rates rose to 25.75% in 9MFY2023 compared with 24.8% in
9MFY2022. Net Profit jumped 171% to Rs 1391.07 crore in 9MFY2023 over 9MFY2022.
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Mahindra &
Mahindra Financial Services: Consolidated Results
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Particulars
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2212 (3)
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2112 (3)
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Var %
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2212 (9)
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2112 (9)
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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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3133.54
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2845.59
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10
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8747.78
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8128.85
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8
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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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219.28
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140.06
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57
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604.33
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374.22
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61
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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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3352.82
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2985.65
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12
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9352.11
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8503.07
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10
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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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1372.97
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1070.72
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28
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3616.90
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3364.43
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8
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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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858.52
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685.67
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25
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2580.66
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1854.72
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39
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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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1121.33
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1229.26
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-9
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3154.55
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3283.92
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-4
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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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63.04
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35.37
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78
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160.98
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102.34
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57
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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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182.10
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-129.70
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PL
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1098.54
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2560.13
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-57
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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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876.19
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1323.59
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-34
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1895.03
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621.45
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205
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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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-56.06
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20.57
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PL
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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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876.19
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1323.59
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-34
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1838.97
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642.02
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186
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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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219.16
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341.87
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-36
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473.59
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159.12
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198
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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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657.03
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981.72
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-33
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1365.38
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482.90
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183
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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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2.95
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5.26
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-44
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5.21
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8.74
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-40
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13.47
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7.07
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91
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P&L of
Assosiate Co.
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7.35
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10.57
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-30
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30.90
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38.93
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-21
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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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661.43
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987.03
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-33
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1391.07
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513.09
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171
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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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21.5
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32.0
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15.5
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5.4
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9.1
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4.7
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Adj BV (Rs)
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120.4
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91.9
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120.4
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91.9
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110.1
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102.6
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*Annualized on
current equity of Rs 246.62 core excluding EO and relevant tax. Face Value:
Rs 2, Figures in Rs crore
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Source:
Capitaline Corporate Database
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