Asset quality concerns return to haunt M&M Financial's investors

While provisioning costs more than double, NPA levels may remain elevated until loan growth recovers

When a company has consistently increased its net profit quarter after quarter for almost two years and worked equally hard to keep a check on non-performing assets (NPAs or bad loans), even one quarter’s miss could sway sentiments significantly, especially when the overall mood is low. That’s exactly what happened with Mahindra and Mahindra Financial Services (M&M Finance). The stock shed over 10 per cent on Wednesday, reacting to June quarter (Q1) results that fell short of expectations. However, considering that M&M Finance is often viewed as an indicator of rural demand, some numbers put out by the company and