MMFSL net profit up 23%

Mahindra & Mahindra Financial Services Ltd, part of the Mahindra Group has registered a 23 per cent growth in net profit at Rs 132.88 crore for the 12 months ended 31 st March 2007 compared to Rs 108.27 crore in 2005-06.

The income from operations for the year ended March 2007 was Rs 836.83 crore compared to Rs 586.1 crore for the year ended 2006. Disbursements grew by 22 per cent YoY at Rs 5440.94 crore in 2007 from  Rs 4477.91 crore in 2006. The Board of Directors has recommended a final dividend of 20 per cent. With interim dividend, the total dividend for the year stands at 40 per cent.

Ramesh Iyer, managing director, Mahindra Finance, said that the company posted better performance despite tightening money market conditions by increasing lending rates, bringing innovative products and increasing customer base. The company forayed in second hand vehicle financing, commercial vehicle financing and two wheeler financing in 2007. MMFSL formed an alliance with Maruti Udyog Ltd to provide finance to latter's vehicles.

"The long term interest rates in F2007 went up by nearly 250 basis points. However due to prudent asset liability management and diversification of the resource base we were able to contain the impact. Going forward the company will pursue the dual strategy of appropriate product mix and lending rates to compensate for interest cost increase," said V Ravi, chief financial officer of Mahindra Finance.

"For the financial year ended 31st March 2007, our turnover rose by 42 per cent signifying the entrenched base of Mahindra Finance," added Iyer.

MMFSL plans to add 50-70 branches this year and is awaiting a license from National Housing Bank to launch Mahindra Rural Housing Finance Company a subsidiary of Mahindra Finance.

Net profit for Q4 was up by 22 per cent to Rs 57.70 crore compared to Rs 47.20 crore in the corresponding quarter of 2006. Income from operations was Rs 262.17 crore in the last quarter compared to Rs 191.04 crore in the corresponding quarter of 2006.

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