Q4 Update: Mahindra Finance reports stellar disbursement, collection efficiency in March quarter

Mahindra and Mahindra Financial Services or Mahindra Finance has reported stellar growth in disbursements and collection efficiency during the January-March quarter of the last fiscal, the non-banking finance company said through an exchange filing on Monday, April 3. 

The Mahindra and Mahindra group-backed financial arm in its fourth quarter business update noted, “the Q4FY23 disbursements grew by 50 per cent year-on-year (YoY) to Rs 13,750 crores, while the financial year 2022-23 (FY23) disbursement jumped by 80 per cent YoY around Rs 49,500 crore.”  

Mahindra Finance in its regulator filing further stated, “Healthy disbursement trends during FY23 have led to business assets at Rs 82,300 crore, growth of around 7 per cent over December 2022 and 27 per cent over March 2022.” 

Meanwhile, the collection efficiency – money collected as a percentage of the amount demanded in loan repayment – was at 105 per cent for March 2023, and it was at 99 per cent during the January-March quarter against 100 per cent for the same quarter of the previous fiscal.  

Mahindra Finance also said, “Stage-3 expected at 4.6 per cent in March quarter as compared to 5.9 per cent in December quarter and Stage-2 expected at 6.7 per cent against 8.4 per cent in the previous quarter – have continued to improve.” 

NBFCs follow Indian Accounting Standards (Ind AS), wherein, they have to classify bad loans in three categories or stages. In this, Stage 1 consists of loans overdue by up to 30 days, stage 2 where loans are overdue by 31-89 days, and stage 3 for loans overdue by more than 90 days. 

The company in its business update also pointed out that the gross non-performing assets (GNPA) – bad loans – as compared to Stage 3 are estimated to be higher by around Rs 1,200 crore, for which it said requires no additional provisions over and above the expected credit loss provision for FY23. 

Mahindra Finance, which is amongst the top tractor financers in India, with over 1000 offices across the country, continued to maintain a comfortable liquidity chest of about three months requirement. 

Mahindra Finance share price on Monday closed more than two per cent higher at Rs 237 apiece on the BSE. 

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