M&M Financial hits 21-month low on disappointing Q3 results

The stock was down 4% to Rs 200, extending its previous day's 5% fall on the BSE.

Mahindra & Mahindra (M&M) Financial Services were down 4% to Rs 200, extending its previous day’s 5% fall on the BSE, after the company reported 38% year on year (yoy) drop in consolidated net profit at Rs 96 crore for the third quarter ended December 2015 (Q3FY16), due to higher provisioning. The company had profit of Rs 157 crore in the same quarter year ago.

Total income during the quarter increased 4.8% to Rs 1,584 crore against Rs 1,512 crore in the corresponding quarter of pervious fiscal. Loan provisions rose 28% to Rs 352 crore from Rs 276 crore over the previous year quarter.

Gross non-performing assets (NPAs) as a percentage of total advances as on December 31, 2015 stood at 10.1% as against 7.1% in the same period last year, while net NPAs rose 120 basis points to 4.6% during the period.

“Effective from previous quarter ended 30th September, 2015, the company has decided to accelerate the recognition of NPAs in a phased manner so as to meet the revised norms of four months before 31st March, 2017. Accordingly, an additional provision of Rs 51 crore (including income de-recognition) has been made with a consequent impact on profit before tax for nine months ended 31st Dec, 2015,” the company said in a statement.

The stock hit an intra-day low of Rs 198, its lowest level since April 2014 on the BSE.  A combined 1.85 million shares changed hands on the counter on the BSE and NSE till 01:42 p.m.