Mahindra Finance Q1 Results: Profit jumps 75% to Rs 927 crore on higher interest margin, lower provisions

Mahindra and Mahindra Financial Services on Tuesday reported a 75 per cent jump in its consolidated net profit at Rs 927 crore in the June quarter of FY27 on higher net interest margins and lower provisions.

On a standalone basis, the Mahindra group's financial services arm reported a net profit of Rs 899 crore, up 70 per cent when compared to the figure of the same period a year ago.

Its chief executive and managing director Raul Rebello said that the company was able to expand NIMs (net interest margins) to 7.3 per cent from 6.7 per cent in the April-June period last year on the back of better cost of funding, which he attributed to a rights issuance done by the company in the year-ago period.


As the advantages wear-off, there will be some compression in NIMs, he said, adding that the company is confident of maintaining it above 7 per cent in the medium term. The company had reported an NIM of 7.5 per cent in the quarter-ago period.

Apart from NIMs, stronger underwriting and account management practices helped control credit costs, Rebello said.

Money set aside for impairments reduced to Rs 570 crore from Rs 660 crore in the year-ago period.

Overall disbursements grew 22 per cent during the quarter, and Rebello said the company has begun its five-year plan of asset growth to Rs 3 lakh crore by FY31 on a good note.

The composition of the book is changing with the non-wheels business, including mortgage and small businesses, growing at a faster clip and now increasing its share to 17 per cent, Rebello said. Over 44 per cent of the book is what it calls as Mahindra strategic business originated through group companies, he said.

From an asset quality perspective, the share of assets overdue for over 90 days increased by 0.04 per cent since March to 3.45 per cent, Rebello said, adding that the company has been taking calls like going slow on certain segments like the ones affected by the West Asia crisis the moment it sees risks flaring up.

The company scrip closed 8.69 per cent higher at Rs 350.65 apiece on the BSE on Tuesday, as against a 0.31 per cent correction on the benchmark.