Mahindra and Mahindra Financial Services

Control on expenses boost profits

Oct 28, 2020 12:10 IST capital market

Mahindra and Mahindra Financial Services (MMFSL), on a consolidated basis, has reported 34% jump in the net profit to Rs 351.35 crore in the quarter ended September 2020 (Q2FY2021), driven by improved margins and cost to income ratio.

The credit cost for the company eased to 393 bps (annualized) in Q2FY2021 compared with 561 bps in preceding quarter, while remained above 242 bps in the corresponding quarter last year. The net interest margin (NIM), on calculated basis, of the company improved to 8.63% in Q2FY2021 from 8.44% in Q1FY2021, while remained low from 8.85% in the corresponding quarter last year.

Income from Operations increased 7% to Rs 2992.39 crore during the quarter ended September 2020, compared to the corresponding previous year quarter. Other Income declined 40% to Rs 78.11 crore. The total Income moved up 5% to Rs 3070.50 crore, while interest expenses rose 2% to Rs 1368.54 crore in the quarter ended September 2020.

The staff cost dipped 15% to Rs 351.08 crore, while other operating expenses plunged 39% to Rs 145.51 crore. The ensuing operating profit improved 28% to Rs 1205.36 crore in the quarter ended September 2020.

Depreciation fell 8% to Rs 39.58 crore during the quarter under review. Provisions & write-off moved up 66% to Rs 665.82 crore. The profit before tax rose 1% to Rs 499.96 crore. After accounting for taxation of Rs 135.06 crore, net profits increased 34% to Rs 351.35 crore in the quarter ended September 2020.

On a standalone basis, total Income increased 5% at Rs 2612.90 crore during the quarter ended September 2020, as against Rs 2486.40 crore in the corresponding period last year. The net profit improved 21% to Rs 303.50 crore during the quarter ended September 2020, as compared to Rs 251.80 crore during the corresponding period last year.

The standalone Assets Under Management (AUM) stood at Rs 81682 crore end September 2020, as against Rs 72732 crore end September 2019, registering a growth of 12%.

The Company maintains a healthy capital adequacy of 25.1% and has adequate Capital and Financial Resources to run its business.

MMFSL currently has a network of 1256 offices. The companys customer base has crossed 6.99 million customers at end September 2020.

The disbursements of Mahindra Finance have declined 45% to Rs 5400 crore in the quarter ended September 2020. The disbursements of the company on consolidated basis dipped 47% to Rs 5500 crore in the quarter ended September 2020.

Asset Quality

GNPA eased to 7.03% of total asset at end September 2020 from 9.19% a quarter ago. NNPA ratio also declined to 4.68% on sequential basis from 5.72% a quarter ago. NPA coverage ratio improved to 35.10% at end September 2020 from 40.10% at end June 2020.

Mahindra Insurance Brokers (MIBL)

During the quarter ended September 2020, MIBL registered income at Rs 60.1 crore as against Rs 78.2 crore, registering a decline of 23% over the same period previous year. The Profit after Tax (PAT) registered was Rs 3.6 crore as against Rs 10.7 crore, registering a dip of 66% over the same period previous year.

Mahindra Rural Housing Finance (MRHFL)

During the quarter ended September 2020, MRHFL disbursed Rs 105.7 crore as against Rs 530.4 crore during the same period previous year, registering a decline of 80% over the same period previous year. MRHFL registered income at Rs 377.2 crore as against Rs 370.4 crore, registering a growth of 2% over the same period previous year. The Profit after Tax (PAT) registered a growth of 100% at Rs 57.4 crore as against Rs 28.7 crore for the same period previous year. GNPA stood at 13.26% and NNPA 9.48% end September 2020.

Book value of the company on standalone basis stood at Rs 121.0 per share and adjusted book value stood at Rs 95.9 per share end September 2020. Book value of the company on consolidated basis stood at Rs 128.5 per share and adjusted book value stood at Rs 97.6 per share end September 2020.

Mahindra Manulife Investment Management (MMIMPL)

During Q2FY2021, MMIMPL earned total income of Rs 7.36 crore up from Rs 4.31 crore in Q2FY2020. The company incurred a loss of Rs 4.31 crore from loss of Rs 8.84 crore during the same period previous year.

The Average Assets under Management (AUM) of MMIMPL for Q2FY2021 was Rs 5036 crore across 14 schemes which showed a decline of 3.5% over the same period previous year. Of these assets, the Company managed Rs 1888 crore of average equity assets in the quarter year ended September 2020 compared to Rs 1521 crore in the same period last year.

Mahindra Manulife Trustee (MMTPL)

During Q2FY2021, MMTPL earned total income of Rs 0.06 crore compared to Rs 0.05 crore during the same period previous year. The company incurred a loss of Rs 0.01 crore equivalent o the loss of the same period previous year.

Mahindra Finance USA, LLC (MFUSA)

During Q2FY2021, MFUSA registered income at US$ 15.93 million as against US$ 17.50 million during the corresponding quarter last year, registering a decline of 9% over the same period previous year.

The PBT was US$ 0.95 million during Q2FY2021 as against US$ 4.41 million during Q2FY2020, registering a decline of 78%. The PAT was US$ 0.68 million during Q2FY2021 as against US$ 3.33 million during Q2FY2020, registering a decline of 80% over the same period previous year.

Ideal Finance (IFL)

IFL registered income at LKR 265 million during Q2FY2021 as against LKR 234 million during Q2FY2021, registering a growth of 13%. The PBT was LKR 73 million as against LKR 42 million, registering a growth of 74%. The PAT surged 92% to LKR 50 million from LKR 26 million.

Financial Performance H1FY2021:

For the half year ended September 2020 (H1FY2021), MMFSL reported 7% rise in the Income from Operations to Rs 5945.87 crore, against the corresponding previous year period. Other Income declined 19% to Rs 193.32 crore. The total Income grew 6% to Rs 6139.18 crore. Interest expenses moved up 6% to Rs 2769.70 crore, while the operating expenses dipped 33% to Rs 915.60 crore leading the operating profits to jump 36% to Rs 2453.88 crore. Depreciation fell 9% to Rs 77.44 crore, while Provisions & write-off increased 50% to Rs 1614.67 crore. PBT moved up 19% to Rs 761.77 crore. The effective tax rates stood at 27.1% in H1FY2021 compared with 45.9% in H1FY2020. Net Profit jumped 112% to Rs 783.07 crore in H1FY2021 over H1FY2020.

Mahindra and Mahindra Financial Services: Consolidated Results

 

Particulars 2009 (3) 1909 (3) Var % 2009 (6) 1909 (6) Var % 2003 (12) 1903 (12) Var %
Income from operations 2992.39 2807.10 7 5945.87 5535.86 7 11457.61 9969.53 15
Other Income 78.11 129.39 -40 193.32 239.05 -19 538.84 461.32 17
Total Income 3070.50 2936.49 5 6139.18 5774.91 6 11996.45 10430.85 15
Interest Expenses 1368.54 1345.91 2 2769.70 2608.51 6 5390.56 4432.28 22
Operating Expense 496.60 651.98 -24 915.60 1362.77 -33 2583.91 2412.10 7
Gross Profits 1205.36 938.60 28 2453.88 1803.63 36 4021.98 3586.47 12
Depreciation 39.58 43.20 -8 77.44 84.64 -9 146.87 75.53 94
Provisions and write off 665.82 399.95 66 1614.67 1076.87 50 2318.98 717.11 223
PBT before EO 499.96 495.45 1 761.77 642.12 19 1556.13 2793.83 -44
EO 0.00 0.00 - 228.54 0.00 - 0.00 0.00 -
PBT after EO 499.96 495.45 1 990.32 642.12 54 1556.13 2793.83 -44
Tax Expense 135.06 243.33 -44 206.72 294.82 -30 516.21 973.48 -47
Net Profit 364.90 252.12 45 783.60 347.30 126 1039.92 1820.35 -43
Minority Interest 1.15 2.15 -47 1.55 3.38 -54 10.67 39.98 -73
P&L of Assosiate Co. -12.40 11.48 PL 1.02 24.76  -96 45.90 46.93 -2
PAT 351.35 261.45 34 783.07 368.68 112 1075.15 1827.30 -41
EPS 11.4 8.5 9.8 6.0 17.5 29.7
*Annualized on current equity of Rs 246.29 core excluding EO and relevant tax. Face Value: Rs 2, Figures in Rs crore, PL: Profit to Loss, LP: Loss to Profit
Source: Capitaline Corporate Database

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