M&M Finance slumps as Q4 PAT slides 66% YoY to Rs 235 cr

Mahindra & Mahindra Finance tumbled 13.9% to Rs 145 after consolidated net profit dropped 65.8% to Rs 234.82 crore on 8.05% rise in total income to Rs 3,148.47 crore in Q4 March 2020 over Q4 March 2019.

The company said in order to cover the contingencies that may arise due to COVID-19 Pandemic, it has incorporated the management overlays in the impairment loss allowance and the total provision recognized in the statement of Profit and Loss during the quarter stood at Rs 681.16 crore.

Consolidated Profit Before Tax (PBT) stood at Rs 306.39 crore during the quarter, a decline of 70.6% from Rs 1,041 crore in the same period last year.

Consolidated net profit tumbled 41.2% to Rs 1,075.15 crore in the year ended March 2020 (FY20) from Rs 1827.30 crore posted in the year ended March 2019 (FY19). Total income grew 14.93% to Rs 12,042.35 crore in FY20 over FY19.

M&M Finance said standalone Assets Under Management (AUM) grew 12% to Rs 77,160 crore as on 31 March 2020, as against Rs 68,948 crore reported in the same period last year.

During the financial year ended March 31, 2020, the total value of assets financed was Rs 42,388 crore as against Rs 46,210 crore during the corresponding period last year, a decline of 8% over the same period previous year. While the company has gained market share in many of the product lines, however in view of declining sales of Vehicles and Tractors, the disbursements have been lower.

M&M Finance said based on the economic package being announced by the government, the company expects business to start in a phased manner. Demand may gradually start with dealers selling smaller vehicles and tractors. The company said it has started operations in a phased manner in 524 branches in green and amber zones in the month of May 2020, following all safety measures. Lastly, M&M Finance assured its capital and debt position is strong and the ALM position is well balanced.

During the quarter year ended March 31, 2020, Mahindra Asset Management Company earned fees of Rs 3.5 crore as against Rs. 3.3 crore during the corresponding quarter last year. The company incurred a loss of Rs 10.1 crore compared to a loss of Rs 7.7 crore during the same period previous year.

Mahindra & Mahindra Financial Services, part of the $20.7 billion Mahindra Group, is a non-banking finance company.

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