Further, the one-time impact of reversals of deferred tax asset of Rs 104 crore recognized in the Standalone statement of profit and loss and Rs 125.24 crore recognized in the consolidated statement of profit and loss also weighed on earnings for quarter and half year ended September 2019.

The credit cost for the company declined on sequential basis to 220 bps (annualized) in Q2FY2020 compared with 379 bps in preceding quarter, but increased from 154 bps in the corresponding quarter last year. The net interest margin (NIM), on calculated basis, of the company fell to 8.04% in Q2FY2020 compared with 8.67% in the corresponding quarter last year.

Income from Operations increased 16% to Rs 2807.10 crore during the quarter ended September 2019, compared to the corresponding previous year quarter. Other Income jumped 16% to Rs 140.87 crore. The total Income moved up 16% to Rs 2947.97 crore, while interest expenses surged 28% to Rs 1345.91 crore in the quarter ended September 2019.

The staff cost moved up 23% to Rs 414.16 crore, while other operating expenses were flat at Rs 237.81 crore. The ensuing operating profit improved 5% to Rs 950.09 crore in the quarter ended September 2019.

Depreciation surged 134% to Rs 43.20 crore during the quarter under review. Provisions & write-off moved up 65% to Rs 399.95 crore. The profit before tax declined 22% to Rs 506.93 crore. After accounting for taxation of Rs 243.33 crore, net profits dipped 39% to Rs 263.60 crore in the quarter ended September 2019.

On a standalone basis, total Income increased 18% at Rs 2486.40 crore during the quarter ended September 2019, as against Rs 2109.70 crore in the corresponding period last year. The net profit declined 34% to Rs 251.8 crore during the quarter ended September 2019, as compared to Rs 381.4 crore during the corresponding period last year.

AUM of the company increased 15% to Rs 63793 crore at end September 2019 on standalone basis. MMFSL currently has a network of 1337 offices. The company's customer base has increased to 6.45 million customers at end September 2019. The disbursements of Mahindra Finance declined 10% to Rs 9747 crore in the quarter ended September 2019. The disbursements of the company on consolidated basis fell 12% to Rs 10277.5 crore in the quarter ended September 2019.

Asset Quality

GNPA declined to 7.20% of total asset at end September 2019 from 7.40% a quarter ago. NNPA ratio rose to 5.80% on sequential basis from 5.70% a quarter ago. NPA coverage ratio dipped to 19.50% at end September 2019 from 24.90% at end September 2018.

Mahindra Insurance Brokers (MIBL)

During the quarter ended September 2019, MIBL registered income at Rs 78.2 crore as against Rs 75.2 crore, registering a growth of 4% over the same period previous year. The Profit after Tax (PAT) registered was Rs 10.7 crore as against Rs 11.8 crore, registering a decline of 9% over the same period previous year.

Mahindra Rural Housing Finance (MRHFL)

During the quarter ended September 2019, MRHFL disbursed Rs 530.5 crore as against Rs 824 crore during the same period previous year, registering a dip of -36% over the same period previous year. MRHFL registered income at Rs 370.4 crore as against Rs 334.9 crore, registering a growth of 11% over the same period previous year. The Profit after Tax (PAT) dipped 52% at Rs 28.7 crore as against Rs 60 crore for the same period previous year.

Mahindra Asset Management Company (MAMCPL)

During the quarter ended September 2019, MAMCPL earned revenues of Rs 4.31 crore as compared to Rs 9.74 crore in the same period previous year. The company incurred a loss of Rs 8.84 crore compared to a loss of Rs 11.54 crore during the same period previous year. During the half year ended September 2019, MAMCPL earned revenues of Rs 8.44 crore as compared to Rs 19.15 crore in the same period previous year The company incurred a loss of Rs 17.40 crore compared to a loss of Rs 17.76 crore during the same period previous year.

The Average Assets under Management (AUM) of MAMCPL for the period ended September 2019 was Rs 5221 crore across eleven schemes which showed a growth of 20% over the same period previous year. Of these assets, MAMCPL managed Rs 1521 crore of average equity assets in the quarter ended September 2019 which compared to Rs 1315 crore in the same quarter last year.

Mahindra Finance USA, LLC (MFUSA)

During the quarter ended September 2019, MFUSA registered income at US$ 17.50 million as against US$ 17.10 million, registering a growth of 2% over the same period previous year. The Profit after Tax (PAT) during the quarter ended September 2019, registered was US$ 3.33 million as against US$ 3.79 million, a decline of 12% over the same period previous year.

During the half year ended September 2019, MFUSA registered income at US$ 35.02 million as against US$ 33.55 million, registering a growth of 4% over the same period previous year. The Profit after Tax (PAT) during the half year ended September 2019, registered was US$ 7.24 million as against US$ 7.89 million, a decline of 8% over the same period previous year.

Financial Performance H1FY2020

For the half year ended September 2019 (H1FY2020), MMFSL reported 20% rise in the Income from Operations to Rs 5535.86 crore, against the corresponding previous year period. Other Income increased 16% to Rs 263.81 crore. As a result, the total Income grew 20% to Rs 5799.67 crore. Interest expenses moved up 30% to Rs 2608.51 crore, while the operating expenses increased 26% to Rs 1362.78 crore leading the operating profits to rise 4% to Rs 1828.39 crore. Depreciation increased 144% to Rs 84.64 crore, while Provisions & write-off surged 83% to Rs 1076.87 crore. PBT fell 41% to Rs 666.88 crore. The effective tax rates stood at 44.2% in H1FY2020 compared with 33.3% in H1FY2019. Net Profit plunged 51% to Rs 372.06 crore in H1FY2020 over H1FY2019.