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Systematix Research Report
Mahindra and Mahindra Financial Services Ltd. reported a profit of Rs 8.9 billion in Q3 FY22 due to write-backs. The management continues to guide for an additional 20-30% write-back of provisions in Q4 FY22E.
M&M Finance has been prudent in recognising the credit cost upfront and provided well with its stage-III provision cover at 53%.
The management overlay is now at ~3.2% of assets under management. Despite reduction in supply, its disbursement run-rate and collections are at pre-Covid-19 levels.
We remain sanguine about provision write-backs and expect a disbursement run-rate of Rs 80 billion in Q4 FY22E.
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