Mahindra & Mahindra Financial Services' (MMFS) Q1FY19 revenue has improved by 20.6% yoy to Rs1,939cr against Rs1,608.7cr. The NII for the quarter has improved by 45% yoy to Rs1,077cr. MMFS' net profit for the quarter was 13% ahead of our estimates at Rs269cr, against Rs201.4cr yoy. The beat on net profit was due to higher revenue growth.
MMFS' AUM growth for the quarter was 21% yoy to Rs58,711cr. Growth was driven by tractors, CV and SME segments.
During Q1FY19, the share of Auto/UV declined from 30% to 27% yoy, which was offset by SME financing (8% to 12% yoy).
Its disbursement growth was 35% yoy to Rs10,338cr for the quarter.
The company opened 7 new branches in the quarter, taking the total branch count to 1,291 branches.
Calculated NIM on AUM increased 130bp YoY to 7.7% driven largely equally by higher yield on loans (better asset quality performance), lower cost of funds and lower leverage.
Like peers MMFS has also increased the share of bank borrowings & CPs and has decreased the share of NCDs over the past year.
The borrowing mix is as follows- Banks: 30%, NCD: 44%, PD: 8%, CP: 16% and securitization: 1%.
C/I ratio for the quarter stood at 35.3%.
Total Provisions as a %age of loans stood at 5.3% vs 5.1% a quarter ago and 6.7% a year ago.
PCR including standard assets provisions largely stable qoq at ~59%.
Key conference call highlights
The company has gained market share from banks.
OEM discounts are still continuing in order to reduce inventory. Management expects it to abate by the festival season.
Mahindra HFC is present in 70,000 villages, while MMFS is present in 3 lakh villages. The HFC will expand into all these villages.
Cost of Funds should increase by 15bps in FY19E.
Growth also came in from 100 new branches opened in the past 12 months.
For Mahindra Rural Housing Finance, there is NPL hike in certain geographies like Maharashtra (45-50% of total loan book). Management expects it to improve in upcoming quarter.
MH, TN, AP, MP and Gujarat are the key states for Mahindra Rural HFC.
Mahindra & Mahindra Financial Services Ltd ended at Rs. 517.20, up by 4.65 points or 0.91% from its previous closing of Rs. 512.55 on the BSE.
The scrip opened at Rs. 517 and touched a high and low of Rs. 527.45 and Rs. 504.65 respectively. A total of 50,73,140 (NSE+BSE) shares were traded on the counter. The stock traded below its 100 DMA.
Please use the temporary password sent on your email id or mobile no.
Update Mobile no.
Why you need to update your Mobile number ?
By providing verified mobile number we provide more exclusive information in the website.
Update Mobile no.
Terms & Conditions
By clicking on submit button, you authorize IIFL & its representatives & agents to provide information about various products, offers and services provided by IIFL through any mode including telephone calls, SMS, letters etc. . you confirm that laws in relation to unsolicited communication referred in National Do Not Call Registry as laid down by Telecom Regulatory Authority of India will not be applicable for such information/ communication.