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Mahindra and Mahindra Financial Services
(MMFSL), on a consolidated basis, has reported 43% dip in the net profit to Rs 281.09
crore in the quarter ended September 2023 (Q2FY2024). The credit cost for the
company rose to 276 bps (annualized) in Q2FY2024 compared with 273 bps in
preceding quarter and 113 bps in the corresponding quarter last year. The net
interest margin (NIM), on calculated basis, of the company eased to 7.10% in
Q2FY2024 compared with 8.21% in the corresponding quarter last year.
Income from Operations increased 22% to Rs 3485.02
crore during the quarter ended September 2023, compared to the corresponding
previous year quarter. Other Income jumped 109% to Rs 378.45 crore.
The total Income moved up 28% to Rs 3863.47 crore,
while interest expenses increased 43% to Rs 1703.37 crore in the quarter ended
September 2023.
The staff cost moved up 14% to Rs 576.07 crore, while
other operating expenses increased 41% to Rs 501.39 crore. The ensuing
operating profit improved 11% to Rs 1082.64 crore in the quarter ended
September 2023.
Depreciation rose 23% to Rs 67.08 crore during
the quarter under review. Provisions & write-off zoomed 211% to Rs 646.44 crore.
The profit before tax declined 48% to Rs 369.12 crore. After accounting for
taxation of Rs 96.03 crore, net profits fell 43% to Rs 281.09 crore in the
quarter ended September 2023.
MMFSL currently has a network of 1368 offices.
On
a standalone basis, Total Income was at
Rs 3,240 crore for the quarter, an increase of 24% YoY aided by growth in asset
book. Net Interest Income at Rs 1,674 crore increased by 9% YoY. Net Interest
Margin for the quarter at 6.5% was impacted by higher borrowing rates coupled
with change in portfolio mix in favour of better credit quality customers.
Book
value of the company on standalone basis
stood at Rs 137.4 per share and adjusted
book value stood at Rs 124.1 per share end September 2023.
Book
value of the company on consolidated
basis stood at Rs 150.8 per share and adjusted
book value stood at Rs 133.1 per share end September 2023.
Business
highlights and asset quality
Disbursement growth during the quarter
was broad-based with a YoY growth of 13% and a sequential growth of 9%. In the
first half, the company disbursed Rs 25,480 crore, a growth of 20% YoY, which
led to a strong gross asset book size of Rs 93,723 crore, resulting in growth
of 13% during the first half of FY24.
Collection efficiency during the quarter
remained strong at 96%, an improvement over the level observed in Q1 FY24 and
marginal reduction over Q2FY23. With improving underwriting standards and focus
on early bucket delinquency, the Company maintained its asset quality during
the quarter with Stage-3 assets at 4.3% (4.3% as of June 2023), and Stage-2
assets, at 5.7% (an improvement over 6.4% as of June 2023).
Gross Stage 3 level was maintained at
4.3%, similar to June end level. Gross Stage 2 improved from 6.4% to 5.7%
during the same period. The credit cost during Q2FY24 was at Rs 627 crore (2.4%
of average assets) as compared to Rs 198 crores (1.0%) in Q2FY23. The net
write-offs were lower at Rs 351 crore compared to Rs 543 crore during Q2FY23.
Q2FY23 witnessed a sharp improvement in both Stage 2 and Stage 3 leading to a
provision write-back of Rs 345 crores. Both Stage 2 and Stage 3 have now
stabilized at more normalized levels. The provision charge for Q2 FY24 was Rs
276 crore.
The gap between GNPA (as per IRACP) and
Gross Stage- 3 (as per IND-AS) is now range-bound and was at Rs 1,199 crore as
at September end (Rs 1,144 crore as at June end). The restructured portfolio
has now reduced to Rs 1,502 crore at end of September 2023 from Rs 1,860 crore
as a the end of June 2023.
Balance Sheet remains strong with
Capital adequacy at 18.7%. In addition, the company maintained a comfortable
liquidity chest upwards of 2.5 months` requirements. The provision coverage on
Stage 3 assets increased from 60.1% (as of June end) to 61.2% in current
quarter.
The partnership with the State Bank of
India to undertake co-lending for providing Priority Sector Loans will further
bolster MMFSL’s presence across India and help improve market share in pickups and
small CVs segments. This association aims at reducing the turnaround time and
contactless loan process. Furthermore, the company has acquired a 20% stake in
Mahindra Insurance Brokers Ltd (MIBL) to make it a wholly-owned subsidiary.
The Company’s Capital Adequacy is
healthy at 18.7%. Provision coverage on Stage 3 loans remained prudent at 61.2%.
As of September end, the Company carried a total liquidity buffer of
approximately Rs 8,300 crore covering a little over 2.5 months’ gross
obligation.
For the full year FY24, the Company
expects the credit charge in the range of 1.5% to 1.7%.
Subsidiaries
Mahindra Rural Housing Finance (MRHFL)
In Q2FY2024, MRHFL registered income at
Rs 331 crore as against Rs 328 crore in Q2FY2023, a growth of 1% over the same
period previous year. The Profit After Tax (PAT) registered was Rs 11.6 crore in
Q2FY2024, as against Rs 31.1 crore in Q2FY2023.
Mahindra Insurance Brokers (MIBL)
In Q2FY2024, MIBL registered income at
Rs 289 crore as against Rs 94 crore in Q2FY2023, a growth of 208% over the same
period previous year. The Profit After Tax (PAT) in Q2FY2024, registered was Rs
28.6 crore as against Rs 6.1 crore in Q2FY2023, a growth of 365% over the same
period previous year.
Mahindra Manulife Investment
Management (MMIMPL)
During the quarter year ended September
30, 2023, MMIMPL registered total income at Rs 14.3 crore as against Rs 10.1
crore in Q2FY2023, a growth of 42% over the same period previous year. MMIMPL
incurred a loss of Rs 8.5 crore compared to a loss of Rs 7.7 crore during the
same period previous year.
The Average Assets under Management
(AUM) of MMIMPL for the quarter ended September 30, 2023, was Rs 12,582 crores
across 21 schemes which showed an increase of 37% over the same period previous
year. Of these assets, the Company managed Rs 10,912 crores of average equity
assets in the quarter ended September 30, 2023, a growth of 52% compared to Rs
7,169 crores in the same period last year.
Mahindra Manulife Trustee (MMTPL)
During the quarter year ended September
30, 2023, MMTPL registered income at Rs 0.3 crore as against Rs 0.2 crore in
Q2FY2023, a growth of 11% over the same period previous year. MMTPL’s profit for
the current as well as the previous year September quarter remained static at
Rs 0.1 crore.
Mahindra Ideal Finance (MIFL)
In Q2FY2024, MIFL registered income at
LKR 588 Million as against LKR 460 Million in Q2FY2023, a growth of 28% over
the same period previous year. The Profit After Tax (PAT) registered was LKR 30
Million in Q2FY2024, as against LKR 18 Million in Q2FY2023.
Mahindra Finance USA, LLC (MFUSA)
In Q2FY2024, MFUSA registered income at
USD 20.6 Million as against USD 15.5 Million in Q2FY2023, registering a growth
of 33% over the same period previous year. The Profit After Tax (PAT) in
Q2FY2024, registered was USD 4.5 Million as against USD 3.9 Million in Q2FY2023,
registering a growth of 15% over the same period previous year.
Financial Performance H1FY2024:
For the half year ended September 2023
(H1FY2024), MMFSL reported 22% rise in the Income from Operations to Rs 6853.85
crore, against the corresponding previous year period. Other Income increased 97%
to Rs 646.53 crore. As a result, the total Income grew 26% to Rs 7500.38 crore.
Interest expenses moved up 47% to Rs 3300.56 crore, while the operating
expenses increased 19% to Rs 1988.97 crore
leading the operating profits to rise 9% to Rs 2210.85
crore. Depreciation increased 36% to Rs 133.44 crore, while provisions &
write-off increased 35% to Rs 1239.26 crore. PBT fell 18% to Rs 838.15 crore.
The effective tax rates stood at 25.8% in
H1FY2024 compared with 26.4% in H1FY2023. Net Profit declined 12% to Rs 639.78 crore
in H1FY2024 over H1FY2023.
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Mahindra &
Mahindra Financial Services: Consolidated Results
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Particulars
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2309 (3)
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2209 (3)
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Var %
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2309 (6)
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2209 (6)
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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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3485.02
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2848.32
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22
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6853.85
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5614.24
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22
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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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378.45
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180.96
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109
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646.53
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328.99
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97
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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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3863.47
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3029.28
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28
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7500.38
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5943.23
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26
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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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1703.37
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1191.81
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43
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3300.56
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2243.93
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47
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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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1077.46
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863.16
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25
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1988.97
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1666.08
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19
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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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1082.64
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974.31
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11
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2210.85
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2033.22
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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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67.08
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54.57
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23
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133.44
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97.94
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36
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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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646.44
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207.64
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211
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1239.26
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916.44
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35
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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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369.12
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712.10
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-48
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838.15
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1018.84
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-18
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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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-56.06
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-100
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0.00
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-56.06
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-100
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-56.06
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20.57
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PL
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PBT after EO
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369.12
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656.04
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-44
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838.15
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962.78
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-13
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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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96.03
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175.85
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-45
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216.61
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254.43
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-15
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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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273.09
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480.19
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-43
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621.54
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708.35
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-12
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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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6.15
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1.66
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270
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9.68
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2.26
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328
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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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14.15
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11.85
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19
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27.92
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23.55
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19
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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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281.09
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490.38
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-43
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639.78
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729.64
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-12
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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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9.1
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17.2
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10.4
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12.5
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17.1
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9.1
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Adj BV (Rs)
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133.1
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113.1
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133.1
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113.1
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131.7
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110.1
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*Annualized on
current equity of Rs 246.77 core excluding EO and relvant tax. Face Value: Rs
2, Figures in Rs crore
PL: Profit to
loss, LP: Loss to profit
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Source:
Capitaline Corporate Database
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