Mahindra and Mahindra Financial Ltd on Friday reported 66 per cent fall in consolidated net profit at Rs 239 crore for March quarter 2019-20 due to higher provisions.
The company had posted a net profit of Rs 701 crore in the year-ago same period.
In order to cover the contingencies that may arise due to COVID19 pandemic, it incorporated the management overlays in the impairment loss allowance and the total provision during the quarter stood at Rs 681.16 crore, it said in a release.
Total income increased by 8 per cent to Rs 3,140 crore during the latest quarter as against Rs 2,902 crore in January-March 2018-19, Mahindra and Mahindra Financial (Mahindra Finance) said.
During 2019-20, the company's net profit fell by 42 per cent to Rs1,086 crore as against Rs 1,867 crore a year ago.
Total income in the last fiscal howeverincreased by 15 per cent to Rs 11,996 croreas against Rs 10,431 crore in 2018-19, it added.
On its operations amid the lockdown, Mahindra Finance said itcontinues to be a leading financer for automotive and tractors including pre-owned vehicle segment, in rural & semi urban markets.
"While the company has gained market share in many of the product lines, in view of the declining sales of vehicles and tractors, the disbursements have been lower," it said further.
During the last fiscal, the total value of assets financed was Rs 42,388 crore, down by 8 per cent from Rs46,210 crore a year ago.
The outbreak of COVID-19 pandemic has resulted in further slowdown in economic activities across the country, which even otherwise was on a slow pace . "On account of this we had impacts on business and recovery in the last quarter of the financial year," it said.
"Based on the economic package being announced by the government, post lockdown we expect business to start in a phased manner. Demand may gradually start with dealers selling smaller vehicles and tractors," Mahindra Finance said.
The company has started operations in a phased manner in 524 branches in green and amber zones in May 2020, following all safety measures.
The company continued its effort through the year to improve asset quality and has complied with the prudential guidelines issued by the Reserve Bank of India and has also been making accelerated provision.
The company's capital and debt position is strong and the ALM position is well balanced.The board after a detailed discussion, decided to conserve capital given the current situation and did not recommend any dividend for the year.
Mahindra Finance stock closed 0.39 per cent down at Rs167.75 on the BSE.
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