Mahindra & Mahindra Financial Services Ltd (MMFSL) on Friday reported a 29.6 percent year-on-year (YoY) decline in net profit at Rs 629 crore for the third quarter ended December 31, 2022.

In the corresponding quarter last year, the company posted a net profit of Rs 894 crore. CNBC-TV18 Polls had predicted a profit of Rs 360 for the quarter under review.

In the quarter ended December 31, 2021, the company's net NPA (stage 3 assets), stood at 5.63 per cent (as per IND-AS accounting norms). Ramesh Iyer, VC & MD, M&M Financial Services told CNBC-TV18 that the company expects to see a declining trend in NPA in the coming quarters.

“The overall collections have been pretty good even in January, if you see normally at the back of the quarter gone by one expects the first month of the next quarter to be lower collection. But we ended up with 95 percent collection and the NPA holding up at the same level as the previous quarter. So put these two together, clearly we would see a declining trend. I would not want to put a number, but definitely one would see a declining trend,” added Iyer.

Additionally he said the company expects to see a 20 percent Asset Under Management growth in FY24.

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“We are seeing quarter on quarter (QoQ) growth in AUM clearly, and that's at the back of very healthy disbursement that's happening. And I think it will continue to move in this direction. And we are currently growing at about 20 percent and I think we would kind of keep this direction,” said Iyer.

Expect Housing Finance to see changes in the book

Iyer added that in the coming quarters the housing finance book can change with segments from affordable high-end customers in rural as well as affordable housing.

“These two will put together the book will change to 50 percent from affordable housing and 50 from the rural. And then you will start seeing change in both the color of the book as well as the growth of the book beginning to happen. And that's our clear strategy for the next three years,” he added.

The total income of the company increased by 12 percent to Rs 3,353 crore during the quarter ended December 31, 2022, as against Rs 2,986 crore during the corresponding quarter last year. The Net Interest Income (NII) of the company stood at Rs 1,650 crore, up 7 percent YoY.

The loan book increased by 21 percent to Rs 77,344 crore compared to Q3FY22. Disbursement for the quarter at Rs. 14,467 crore was up 80 percent on YoY basis. The company's Capital Adequacy stood at a healthy 23.4 percent.

Shares of Mahindra and Mahindra Financial Services closed at Rs 262, up 7.8 percent from the previous close on the BSE.

Also read: Mahindra Finance's Q3 profit slides to Rs 629 crore, beats estimates

First Published:Feb 6, 2023 5:55 PM IST