Mahindra Finance Q3FY22 Results: Reports Consolidated Profit of Rs 992 crore

Mahindra & Mahindra Financial Services Limited (Mahindra Finance), a leading provider of financial services in the rural and semi-urban markets, today reported a consolidated profit of Rs 992.29 crore for the quarter ended December 31, 2021, as against Loss (after Tax) of Rs 223.18 crore during the corresponding quarter last year.

The company's revenue from operations was almost flat at Rs 2,974.28 crore in the reported quarter against Rs 2,957.96 crore posted last year.

In terms of operations, the company in a statement said, "Q3 witnessed some normalcy returning. Mobility improved further and there was better visibility on cash flows - both farm & infra and demand for vehicles. These positive trends are reflected in the Company's Q3 disbursement. For the Q3 (Oct-Dec 2021), total disbursement stood at Rs 8,032 Crore, a 28% growth year-on-year (and a 24% growth sequentially), while collection efficiency during the quarter stands at 95%, as compared to Q3 of last year at 88%."

In the tractor financing segment, it has witnessed a rise in market share by expanding our presence. This has led the company to regain its No. 1 position in tractor financing. With our smart branches, we are offering very attractive programs for new product lines.'

With the millennium mindset changing, consumers want to be asset-light, thereby making our leasing and subscription business, Quiklyz, the new popular way to own the vehicle.

Assets and provisioning

The gross business assets were at Rs 63,944 Crore as on December 2021, as against Rs 66,525 Crore as on December 31, 2020. Sequentially, there has been a marginal increase. With an uptick in disbursements, we expect further growth in our business assets.

In the backdrop of intensified collection efforts and accelerated repossessions/ settlements, the Gross Stage 3 witnessed sequential improvement from 12.7% to 11.3% as of December end. The Company expects further improvements in quarters to come. Stage 2 also showed a similar declining trend sequentially from 19.7% to 17.8% at December end.

As of December 2021, the provision coverage for Stage 3 assets was healthy at 53.2%, well ahead of the model provisions. Consequently, Net Stage 3 was at 5.6% as on December 31, 2021. By year-end, the Company aims to bring this ratio below 4%.

As of December 31, 2021, the restructured loans stood at Rs 4,378 Crore. The Company carried a cumulative provision of Rs 873 Crore (19.9% coverage) on such contracts as of December 31, 2021.

The cumulative management overlay as on December 31, 2021, stood at Rs. 2,038 Crore.

The Collection War Room set-up in Q2FY22 was fully functional during the quarter.