M&M Financial Services Q2 Result: Profit Jumps 57% But Misses Estimates

Mahindra and Mahindra Financial Services Ltd.'s second-quarter profit jumped 57% on the back of a rise in total income and assets under management. However, profit missed analysts' estimates.

The company reported a net profit of Rs 369 crore in the quarter ended Sept. 30, 2024, according to an exchange filing. That compares with the consensus estimates of Rs 473 crore given by analysts polled by Bloomberg.

The non-banking financial company's total income grew 21% on year and 4% on quarter to Rs 3,925 crore, while assets under management rose 20% on year to Rs 1.12 lakh crore.

Healthy net interest income from the financier aided the bottom line. NII was up 19% on year and 3% quarter to Rs 1,991 crore.

However, a mere 1% on-year fall in disbursements came as a surprise at Rs 13,162 crore. Sequentially, it was up 3%. This was because of a slowdown in passenger vehicles and commercial vehicles in the first half of the current financial year.

As it is the case for the industry, asset quality showed a mixed trend, with stage-3 assets reporting at 3.8% at the end of September, up from 3.6% a quarter ago but an improvement from 4.3% a year ago.

"About 40% of this increase was contributed by Tractor segment. With Kharif cashflows, the Company expects normalization in Q3 FY25. Stage-2 and Stage-3 assets put together were at 10.3%," the company said in a press release.

The collection efficiency remained stable at 96%, consistent with the same quarter of the previous year.