Mahindra Finance on Tuesday reported a 36.8% year-on-year (y-o-y) fall in standalone net profit for the quarter ended March to Rs 234.07 crore, as the NBFC’s provision burden outweighed growth in its total income. Standalone total income rose 9.2% to Rs 1,825.45 crore from Rs 1,672.1 crore in the corresponding period a year ago, while loan provisions and write-offs jumped 232% from the year-ago period to Rs 361.41 crore.
In the quarter ended December, Mahindra Finance had posted a net loss of Rs 15.64 crore as collections from the company’s exposure to rural markets, commercial-vehicle finance and other cash-based segments of the economy.
The total value of assets financed by the company stood at Rs 8,376 crore, 23% higher than Rs 6,811 crore in the year ago. Total assets under management grew 14% to Rs 46,776 crore as on March 31.
With effect from the quarter ended June 2016, the company has started considering the value of underlying security to determine 100% provisioning for assets which were overdue for 24 months. The move has resulted in provisions of Rs 83.37 crore for the year ended March 31, 2017, lower than Rs 179.58 crore for the nine months ended December 31, 2016.
“The company’s non-performing assets (NPAs) had increased during the first three quarters of the year in view of lower economic activities and weak farm cash flow. The fourth quarter witnessed positive change with improved farm cash flow resulting in reduction of gross and net NPA with overall improvement in collection efficiency,” Mahindra Finance said in a statement.