Capitaline

Results 05-May-24

Analysis

Mahindra & Mahindra Financial Services

AUM rises 24%

Mahindra and Mahindra Financial Services (MMFSL), on a consolidated basis, has reported 2% dip in the net profit to Rs 670.35 crore in the quarter ended March 2024 (Q4FY2024). The credit cost for the company rose to 144 bps (annualized) in Q4FY2024 compared with 143 bps in preceding quarter and 41 bps in the corresponding quarter last year. The net interest margin (NIM), on calculated basis, of the company declined to 7.32% in Q4FY2024 compared with 8.05% in the corresponding quarter last year.

Income from Operations increased 18% to Rs 3865.78 crore during the quarter ended March 2024, compared to the corresponding previous year quarter. Other Income jumped 83% to Rs 467.16 crore. The total Income moved up 23% to Rs 4332.94 crore, while interest expenses increased 26% to Rs 1860.88 crore in the quarter ended March 2024.

The staff cost fell 7% to Rs 560.08 crore, while other operating expenses increased 52% to Rs 589.87 crore. The ensuing operating profit improved 24% to Rs 1322.11 crore in the quarter ended March 2024.

Depreciation rose 11% to Rs 72.18 crore during the quarter under review. Provisions & write-off jumped 340% to Rs 369.64 crore. The profit before tax declined 4% to Rs 880.29 crore. After accounting for taxation of Rs 225.09 crore, net profits fell 2% to Rs 670.35 crore in the quarter ended March 2024.

Business highlights

AUM (Business assets) crosses 1 lakh crore at Rs 1,02,597 crore, up 24% yoy.

Disbursement: FY24 Rs 56,208 crore, up 13% yoy. Q4FY24 Rs 15292 crore, 11% yoy.

Continued Leadership in Wheels: Passenger vehicles, Pre-owned vehicles and Tractors.

NII margins improved QoQ 7.1% vs 6.8%. FY24 margins was at 6.8% against 7.6%.

Robust Asset quality: GS2%+GS3% < 9%. Stage-3 at 3.4% vs. 4.0% end December 2023.

Credit Cost: YoY 1.7% against 1.2%. (FY24 target 1.5% – 1.7% achieved)

A one-time provision of Rs 136 crore towards fraud at one of the Company’s branches

Capital Adequacy healthy at 18.9% - Tier-1 Capital at 16.4%. Provision coverage on Stage 3 loans remained prudent at 63.2%. Total liquidity buffer comfortable at Rs. 7,950 crore.

Subsidiaries:

Mahindra Insurance Brokers: Total Income more than Rs 1,000 crore, PAT more than Rs 100 crore

Mahindra Rural Housing: Asset Quality improvement: Gross Stage 3 @ 9%

Mahindra Manulife: AUM crosses Rs 20,000 crore (On 1st April 2024)

Financial Performance FY2024:

For the year ended March 2024 (FY2024), MMFSL reported 20% rise in the Income from Operations to Rs 14412.33 crore, against the corresponding previous year period. Other Income increased 81% to Rs 1557.99 crore. As a result, the total Income grew 24% to Rs 15970.32 crore. Interest expenses moved up 37% to Rs 6959.20 crore, while the operating expenses increased 19% to Rs 4248.45 crore. Operating profits increased 13% to Rs 4762.67 crore. Depreciation increased 22% to Rs 274.85 crore, while Provisions & write-off surged 65% to Rs 1955.75 crore. PBT fell 8% to Rs 2588.13 crore. The effective tax rates stood at 25.5% in FY2024 compared with 26.5% in FY2023. Net Profit declined 7% to Rs 1932.69 crore in FY2024 over FY2023.

Mahindra & Mahindra Financial Services: Consolidated Results
Particulars	2403 (3)	2303 (3)	Var %	2403 (12)	2303 (12)	Var %
Income from operations	3865.78	3281.73	18	14412.33	12029.51	20
Other Income	467.16	254.62	83	1557.99	858.95	81
Total Income	4332.94	3536.35	23	15970.32	12888.46	24
Interest Expenses	1860.88	1477.40	26	6959.20	5094.30	37
Operating Expense	1149.95	988.45	16	4248.45	3569.11	19
Gross Profits	1322.11	1070.50	24	4762.67	4225.05	13
Depreciation / Amortization	72.18	64.98	11	274.85	225.96	22
Provisions and write off	369.64	84.05	340	1955.75	1182.59	65
PBT before EO	880.29	921.47	-4	2532.07	2816.50	-10
Extra ordinary item (EO)	0.00	0.00	-	0.00	-56.06	-
PBT after EO	880.29	921.47	-4	2532.07	2760.44	-8
Tax Expense	225.09	258.97	-13	645.13	732.56	-12
Net Profit	655.20	662.50	-1	1886.94	2027.88	-7
Minority Interest	0.29	-6.41	-105	10.36	-1.20	-963
P&L of Assosiate Co.	15.44	12.42	24	56.11	43.32	30
PAT	670.35	681.33	-2	1932.69	2072.40	-7
EPS (Rs)*	21.7	22.1		15.7	17.1
Adj BV (Rs)	149.5	131.7		149.5	131.7
*Annualized on current equity of Rs 246.88 core excluding EO and relvant tax. Face Value: Rs 2, Figures in Rs crore
Source: Capitaline Corporate Database

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