The financial arm of the M&M group of companies reported strong results, aided by higher disbursement, despite economic headwinds and a slowdown in the automotive industry
Mahindra & Mahindra Financial Services Ltd (MMFSL) reported a 19% higher net profit at Rs191 crore during the June quarter compared with Rs161 crore in the same period last year, driven by control of transaction cost and maintenance of efficiency levels and higher disbursement.
During the first quarter, the Mahindra & Mahindra (M&M) group company’s total income increased by 31% to Rs1,099 crore from Rs839 crore in the corresponding period last year. Additional general provision on standard assets amounting to Rs2.64 crore was set aside during the quarter ended 30 June 2013.
MMFSL registered a disbursement growth of 32% in the June quarter thus maintaining its leadership position as loan provider for vehicles and tractors in the rural and semi urban markets.
It maintained healthy growth of business and profits despite slowdown in auto industry growth and continuing high cost of borrowings through control of transaction costs and maintaining high collection efficiency levels. MMFSL continued to broad base its consortium of lenders by bringing in new banks, mutual funds, insurance companies and trusts.
MMFSL currently has a network of 675 offices and total assets under management of Rs29,539 crore as on 30th June 2013 as against Rs21,744 crore as on 30th June 2012, a growth of 36%.
We had written about the company in our Street Beat section of the Moneylife magazine (30 May 2013 issue) and recommended the stock at a price of Rs218.
At 2.50pm on Friday, MMFSL was trading 4.5% down at Rs230.40 on the BSE, while the benchmark Sensex was marginally down at 19,769.
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