Falling asset quality, credit costs weigh on major NBFCs in Q2FY25

Driven by cash flow disruptions, challenges seen in unsecured segments

Major non-banking financial companies (NBFCs) faced increased credit costs and a decline in asset quality during the second quarter of FY25 (Q2FY25) compared to the previous quarter. This is primarily due to disruptions in cash flows and challenges in the unsecured segments, including microfinance.

 

For Mahindra & Mahindra Financial Services (M&M Finance), gross stage 3 assets in Q2FY25 stood at 3.83 per cent, 20 basis points (bps) higher than 3.6 per cent in Q1FY25.

 

“….40 per cent of the increase in gross stage 3 has come from the tractor segment. And, we have witnessed pain mostly in the agrarian states