Mahindra Finance Q1 profit jumps 75% to ₹927 crore on higher interest margin, lower provisions

Mumbai, July 21 (PTI) Mahindra and Mahindra Financial Services on Tuesday reported a 75 per cent rise in consolidated net profits. ₹927 crore in the June quarter of FY27 on the back of high net interest margins and low provisions.

The financial services arm of the Mahindra group independently reported net profit as follows: ₹899 crore, an increase of 70 percent compared to the same period in the previous year.

Raul Rebello, CEO and managing director of the company, said that thanks to better financing cost, the company was able to increase NIMs (net interest margins) from 6.7 percent to 7.3 percent in the April-June period last year, and attributed this to the rights issues the company carried out last year.

As the benefits erode, there will be some contraction in NIMs, he said, adding that the company is confident it will keep this rate above 7 percent in the medium term. The company reported that net income was 7.5 percent in the quarter-ago period.

NIMs, as well as stronger underwriting and account management practices, also help control credit costs, Rebello said.

The money allocated for impairment has been reduced ₹570 crore ₹660 crore in the previous year period.

Overall payouts rose 22 percent during the quarter, and Rebello said the company has embarked on a five-year asset growth plan. ₹3 lakh crore by FY31 is a good mark.

Rebello said the composition of the book changed as non-wheel businesses, including mortgages and small businesses, grew faster, increasing their share to 17 percent. He said more than 44 per cent of the book said Mahindra’s strategic business emerged through group companies.

In terms of asset quality, the share of assets overdue by more than 90 days has increased by 0.04 percent since March, reaching 3.45 percent. Rebello added that the company received calls to slow down in certain segments, such as those affected by the West Asian crisis, as soon as it saw risks flare up.

The company’s scenario closed with an increase of 8.69 percent ₹350.65 per capita on the BSE on Tuesday, against a 0.31 per cent correction in the gauge.

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