Non-banking lender Mahindra and Mahindra Financial Services on Friday reported more than doubling of consolidated net for the March quarter at ₹940 crore.
The Mahindra group entity had reported a consolidated net profit of ₹456 crore in the year-ago period.
On a standalone basis, its profit after tax (PAT) for the quarter jumped 55 per cent to ₹873 crore.
Its Chief Executive and Managing Director Raul Rebello said the handsome growth in profit was a result of a multitude of factors on the operation front put in by the company, and not because of low base.
The high profit growth was due to factors like keeping funding costs under control, which expanded the net interest margin by 1 per cent to 7.5 per cent, a higher asset growth at 12 per cent, doubling of fee income, and also tighter controls over operating costs and credit costs, he said.
Rebello said given the current economic climate, where the Middle East conflict is set to impact activity, the lender has set aside ₹217 crore as a provision for any possible reverses.
He said this should not be construed as sign of troubles brewing and stressed that the collection efficiencies of Mahindra Finance are unaffected.
“We can see a cloud, it is not like a storm is brewing,” he said, alluding to the reasons which prompted it to make the provisions. If not for the provision, the quarterly net would have jumped 84 per cent.
The war situation warrants adoption of some prudence, he said, adding that the lender will rebalance its disbursements to take on board the challenges likely to be faced by borrowers.
We will not grow at the cost of both margins and risk parameters, Rebello said.
From an AUM growth perspective, he said the company would want to maintain the mid-teen growth moving forward as well.
Additionally, it has also buffered up its liquidity chest given the present circumstances, he said, without sharing any specifics.
Specifically, the unsecured lending and micro-loans against property will be facing the most headwinds, he said.
The company scrip closed 0.88 per cent down at ₹294.30 a piece on the BSE on Friday, as against a 1.29 per cent correction on the 30-share benchmark on Friday.
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