Mahindra & Mahindra Financial Services posted a net profit of ₹353 crore for Q1FY24, up 58 per cent y-o-y led by a jump in other income to ₹41 crore from ₹12 crore, and an 18 per cent fall in provisions and write-offs to ₹526 crore.

Net interest income rose a muted 7 per cent y-o-y to ₹1,675 crore, due to the impact of change in portfolio mix and increased interest costs. Net interest margin for the quarter was 6.8 per cent.

Cost to income ratio increased to 40.3 per cent from 39.6 per cent a year ago, as per the investor presentation.

Disbursements for the quarter were 28 per cent higher at ₹12,165 crore, taking the loan book to ₹86,732 crore, also up 28 per cent y-o-y and five per cent q-o-q. Of the disbursements, 35 per cent were auto/utility vehicle loans, followed by car loans at 20 per cent, pre-owned vehicle loans at 17 per cent, tractor loans at 13 per cent and CV/CE loans at 11 per cent.

Focus ahead

The NBFC said it maintained its leadership position in tractor and Mahindra Auto vehicle segments, with disbursements broad-based across vehicle segments. Going forward, the focus will be on maintaining market leadership in core segments and accelerating growth in pre-owned vehicle segment, SME, leasing and personal loans.

Gross Stage 3 assets ratio improved to 4.3 per cent from 4.5 per cent a quarter ago and 8 per cent a year ago. Net Stage three ratio at 1.8 per cent was also better than 3.5 per cent recorded last year.

Provision cover on Stage three loans stood at 60.1 per cent. Restructured portfolio reduced to ₹1,860 crore from ₹2,174 crore a quarter ago.

Capital adequacy ratio stood at 21.2 per cent, of which tier-I capital was 18.9 per cent.

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