Mahindra & Mahindra Finance Q2 Results: Net Profit Increases 57%, NII Increases 19.3%

Mahindra & Mahindra Financial Services (M&M Finance) has released its Q2 results for the quarter ended September 30, 2024. The company reported a significant 57% increase in standalone net profit, amounting to ₹369.5 crore. In comparison, the company recorded a net profit of ₹235.2 crore during the same quarter last year. It also reported a 36% increase in consolidated net profit, reaching ₹390 crore. Its total revenue reached ₹3,897 crore in Q2 of FY25.

The company's net interest income (NII) stood at ₹1,963.2 crore, reflecting a YoY growth of 19.3% from ₹1,645.5 crore, same quarter last year. As of September 30, 2024, the company's gross non-performing assets (GNPA) increased to 3.83% from 3.56% on June 30, 2024. Similarly, the net NPA rose to 1.59%, up from 1.46% in the previous quarter. The company's assets under management increased by 20% YoY, reaching ₹1.12 lakh crore.

Quick Insights:

• Revenue: ₹3,897 crore in Q2, up by 21% YoY.
• Net Profit: ₹369.5 crore, up by 57% compared to last year.
• Segment Performance: Vehicle finance slowed during April-September, with disbursements rising only 2% in the first half of the year.
• Management's Take: Strong growth driven by a 20% increase in the gross loan book. Outlook remains positive
• Stock Reaction: M&M Finance Shares down by 7.8% on Wednesday, post results. 

Management Commentary:

The company noted a slowdown in vehicle finance during the April-September period, with disbursements rising by just 2% in the first half of the year.

“About 40% of this increase was contributed by the tractor segment. With Kharif cash flows, the company expects normalisation in Q3 FY25. Stage-2 and Stage-3 assets combined stood at 10.3%,” the company said in its press release, addressing the increase in stressed assets. 

It also emphasized that during the September quarter, stage-3 assets improved to 3.8%, down from 4.3% in the same period last year.

Stock Market Reaction:

The company announced its Q2 results on Tuesday, 22 October 2024. Its shares dropped by 7.8% on Wednesday, hitting an intraday low of ₹259.35 on the BSE. By approximately 10:15 AM, the stock was down by 4.01%, trading at ₹270.25. In contrast, the BSE Sensex recorded a modest gain of 0.21%, standing at 80,391.42 during the same period.

About Mahindra & Mahindra Finance

Mahindra & Mahindra Financial Services is a leading non-banking financial company in India, focusing on providing a range of financial services, including vehicle finance, personal loans, and insurance. The company aims to maintain a 12% market share in the wheels segment while targeting growth of 15-20%. It plans to manage operating expenses at approximately 2.5%.