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ICICI Securities Report
We had expectations from Mahindra and Mahindra Financial Services Ltd. of incremental signals on company treading a path towards normalisation.
Especially, when Q4 is historically strong (seasonally), and peers reported lower stress and growth uptick.
To our disappointment,
stress pool (stage-two/three assets) remained elevated at 21.5% (albeit down from 24%; not descending to our liking);
credit cost settled higher at 5.6% for Q4 FY21/FY21 (with an endeavour to contain net stage-three below 4%); and
disbursements were down 15% year-on-year in Q4 FY21 and more than 40% in FY21 leading to 5% YoY contraction in assets under management.
The near-term outlook, too, is not encouraging with disruption due to Covid-19 resurgence likely to prolong phase towards normalisation.
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