M&M Financial Services Q4 Review

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Mahindra and Mahindra Financial Services Ltd. delivered a largely in-line operating performance comprising of 3% beat on net interest income (adding back excess interest refund of Rs 1.4 billion) and a marginal miss on pre-provision operating profit due to sharp rise in opex.

However, the opex jump needs to be seen in the context of 15% QoQ growth in disbursements and a substantial 17% reduction (Rs 32 billion) in PAR 30 portfolio (excluding material write-offs of Rs 12.1 billion).

M&M Financial Services’ PAR 30 portfolio fell from 29% of business assets as of December 2021 to 22% as of March 2022; within which stage-II / stage-III assets fell from 18% / 11.3% to 14% / 7.7%.

This reduction caused provisioning release of Rs 12.2 billion which was utilized for above-mentioned write-off.

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