Mahindra Finance Q2 Results: Profit Rises 36%

Mahindra & Mahindra Financial Services Ltd. on Tuesday reported a 36% jump in consolidated net profit for the quarter ended September.

The non-bank lender recorded a consolidated net profit of Rs 390 crore for the quarter ended September, compared to Rs 287 crore in the same quarter of the previous fiscal year, according to its stock exchange notification.

On a standalone basis, the company reported a net profit of Rs 369 crore with a 57% jump, but it fell 25% over the Rs 513 crore recorded in the preceding June quarter. The core net interest income grew 19% over the year for the September quarter at Rs 1,991 crore on the back of a 20% growth in gross loan book and the net interest margin remaining stable at 6.5%.

The company, however, said that vehicle finance slowed down during the April-September period and the disbursements were up by only 2% in the first half of the year.

The tractor segment contributed to 40% of the uptick in stressed assets during the September quarter, the company said, adding that the stage-3 assets at 3.8% were better than the 4.3% in the year-ago period.

Among the subsidiaries, Mahindra Rural Housing Finance reported a 37% decline in the September quarter net at Rs 7 crore, Mahindra Insurance Brokers' net profit was down 55% at Rs 13 crore while Mahindra Manulife Investment Management incurred a loss of Rs 2 crore.

The shares of Mahindra Finance closed lower on Tuesday. The shares fell as much as 3.13% during the day to Rs 280 apiece on the NSE. The stock closed 2.59% lower at Rs 281.65 per share. This compares with a 0.28% decline in the benchmark Nifty 50. It has risen 3.24% in the last 12 months and 2.34% year-to-date.

Out of 37 analysts tracking the company, 16 maintain a 'buy' rating, 13 recommend a 'hold,' and eight suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 10.6%.

(With Inputs From PTI)