Mahindra & Mahindra Financial Services Ltd's Q2FY19 standalone net profit rises 132.5% yoy to Rs381.39cr: In-line with Estimates

The company’s standalone NII stood at Rs1,167cr, up 49.04% yoy and 8.35% qoq.

Oct 25, 2018 09:10 IST India Infoline Research Team

Mahindra & Mahindra Financial Services Ltd Q2FY19

Standalone Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
NII 1,167 49.0
Net Profit (adjusted) 381 132.5

Mahindra & Mahindra Financial services Q2FY19 revenue improved 39% yoy to Rs2,148cr from Rs1,540cr. The NII for the quarter rose 49% yoy to Rs1,167cr. Net profit for the quarter was in-line with consensus estimates at Rs381cr, against Rs164cr yoy, indicating an increase of ~133% yoy.

  • MMFS AUM growth for the quarter was 26% yoy to Rs59,473cr.
  • Calculated NIM on AUM expanded 130bps yoy to 8.4%, driven largely by a higher yield on loans.
  • Disbursement growth was 39% yoy to Rs21,194cr for the quarter.
  • The gross stage 3 levels have gone down to 9.0% for the period ended September 30, 2018, from 13.1% during the corresponding period last year.
  • The net stage 3 levels have gone down to 6.0% for the period ended September 30, 2018, from 8.8% yoy.
  • Management stated that to mitigate rising cost of funds, the company will pass on 25bps to customers and some to the dealers too.
  • Management guided for 3% RoA for FY19, also it expects improvement in credit costs in 2HFY19.
  • Write-offs during the quarter – Rs141cr vs. Rs69cr in 1QFY19.
  • As per management delienquency is likely to improve in the next few quarters, according to management.
  • The company financed 4 lakh vehicles in the past six months. 
  • Management said that it is presently borrowing from every possible source. However, it is keeping a close watch on the liquidity situation.

Technical View:

Mahindra & Mahindra Financial Services Ltd ended at Rs. 401.35, up by 28.15 points or 7.54% from its previous closing of Rs. 373.20 on the BSE.
The scrip opened at Rs. 380 and touched a high and low of Rs. 404.90 and Rs. 380 respectively. A total of 58,10,841 (NSE+BSE) shares were traded on the counter. The stock traded above its 200 DMA.

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