A sharp fall in provisions and healthy growth in loan book helped Mahindra & Mahindra Financial Services Limited to report 63% on year rise in net profit for the quarter ended December at Rs 899 crore.
Impairment on financial instruments plummeted by 97% on year to Rs 9.14 crore.
During the quarter, the non-banking financier calibrated the expected credit loss model for small and medium enterprise and trade advance portfolio. It held provision towards expected credit loss amounting to Rs 3,496 crore at the end of December crore against Rs 3,401 crore at end of March 2024.
According to RBI, non-banking financial companies are required to create an impairment reserve for any shortfall in impairment allowances.
Disbursements rose 7% higher for the quarter to Rs 16,467 crore and assets under management of the company grew 19% on year to Rs 1.15 lakh crore.
However, asset quality worsened for the non-bank lender with stage 3 assets at 3.9% as at December end as against 3.83% a quarter ago. Net stage 3 assets also rose to 2.0% against 1.59% a quarter ago.
Overall, collection efficiency remained stable at 95% on a sequential basis.
The company continued to maintain a comfortable liquidity position on its balance sheet, with a liquidity chest of over Rs 9,322 crore.
Total income of the company rose 20% on year to 4,144 crore.
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