Mahindra Finance Q3 results: Net profit down 12% due to higher credit costs

Mahindra & Mahindra Financial Services (M&M Finance), a non-banking financial company (NBFC), posted a 12 per cent year-on-year (Y-o-Y) decline in net profit to Rs 553 crore for the October-December quarter owing to a steep rise in credit costs.

The net profit of the company stood at Rs 629 crore in Q3 FY23. However, sequentially, the profit increased by 135 per cent from Rs 235 crore in Q2 FY24.

The credit costs during the quarter under review jumped by 112 per cent Y-o-Y to Rs 328 crore from Rs 155 crore in Q3 FY23.

The net interest income (NII) of the NBFC clocked a 10 per cent rise to Rs 1,815 crore, while the disbursements grew by 7 per cent to Rs 15,436 crore from a year ago.

“The quarter witnessed broad-based growth with a recorded disbursement of Rs 15,436 crore. Year-to-date (YTD) disbursement until December 2023 reached Rs 40,916 crore, indicating a 14 per cent year-on-year growth. This positive trend in loan growth contributed to the expansion of business assets, now standing at Rs 97,048 crore. This marks a 25 per cent growth since December 2022,” M&M Finance said in their press release.

Also, the collection efficiency (CE) of the company was recorded at 95 per cent, marginally down from 96 per cent in Q2 FY24.

The company said that its capital adequacy remains robust at 18.3 per cent. “We hold a comfortable liquidity position, with a liquidity chest of over 2.5 months,” the release added.