Mahindra Finance Q1 FY23 Results

Mumbai, July 28, 2022: The Board of Directors of Mahindra & Mahindra Financial Services Limited (Mahindra Finance), a leading provider of financial services in the rural and semi-urban markets, at its meeting held today, announced the unaudited financial results for the quarter ended June 30, 2022. Standalone:
Revenue at Rs. 2,499 crores (14% YoY growth) and PAT at Rs. 223 Crore during the quarter
Strong Disbursement growth 145% Y-o-Y; sequential growth of 3%
Loan Book – Rs. 67,693 Crore; Y-o-Y growth of 6%; sequential growth of 4%
Gross Stage 3 at 8.0%; Net Stage 3 at 3.5%
Stage 2 declined sequentially from 14.3% to 11.7%
FY 2023 Q1 Standalone Results: The key highlights of the Financial Performance are:
 Total Income was at Rs. 2,499 Crore for the quarter, an increase of 14% YoY aided by growth
in asset book
 Loan Book increased sequentially by 4.2% to Rs. 67,693 Crore with improvement in
disbursements. Disbursements at Rs. 9,472 crores was higher by 145% YoY
 Net Interest Margins for the quarter were healthy at 8.2%; Net Interest Income at Rs. 1,567
Crore increased by 34% YoY, on the back of low-cost borrowings during the trailing 12-month
period
 Profit after Tax (PAT) was at Rs. 223 Crore for the quarter as against Loss after Tax of Rs.
1,529 Crore during Q1 FY22, which was impacted due to second wave of Covid-19 pandemic.
 Gross Stage 3 marginally increased from 7.7% in March to 8.0% in June despite seasonal
volatility, powered by focused collection initiatives and timely repossessions. This is the lowest
GS3 level witnessed during the first quarter under IND-AS reporting.
 The Company’s Capital Adequacy stands at a healthy 25.9%. Provision coverage on Stage 3
loans maintained at 58.1%.
 As of June end, the Company carried a total liquidity buffer of approximately Rs. 8,700 Crore –
covering 3 months’ obligations.

Consolidated: FY 2023 Q1 Consolidated Results
The Total Income increased by 14% at Rs. 2,914 Crore during the quarter ended June 30, 2022,
as against Rs. 2,567 Crore during the corresponding quarter last year. The PAT stood at Rs. 240
Crore during the quarter ended June 30, 2022, as against Loss after Tax of Rs. 1,573 Crore
during the corresponding quarter last year.
Commenting on the Q1 performance, Mr. Iyer, Vice Chairman and Managing Director highlighted
“We have had a reasonable start to the year. The company has been able to report a satisfactory
top line and bottom-line performance on the back of growth in asset book and control on asset
quality. We look forward to this momentum to continue in subsequent quarters. The first quarter of
last year was impacted due to second wave of Covid-19. As the year progressed, the asset
quality improved and the performance normalized. To that end, the current quarter performance is
not comparable to that of previous year.”
Operations
Disbursement trend continues to indicate demand momentum. Contact intensive businesses have
been doing well with increase in tourism and higher utilization of vehicles. We are witnessing
improved cash flows from the segment of customers we serve resulting in highest ever
disbursement and Collection Efficiency in any first quarter.
In the Tractor and Mahindra UV (utility vehicles) financing segments, we continue to maintain
leadership position. Customised offers at product and geography level are being rolled out to
factor local nuances. Pre-owned vehicle financing continues to be a significant focus area which
shall assist in improvement in growth along with margins.
The SME business registered a sequential growth of approximately 30% and its asset book is
now approximately Rs. 2,800 Crore. This business will continue to further scale up in coming
quarters.
Our digital initiatives of Leasing and Digi Finco are gaining momentum and are receiving
satisfactory response from target customers.

Assets and provisioning
 The gross business assets were at Rs. 67,693 Crore as of June 2022, as against Rs. 64,961
Crore as on March 31, 2022. There has been an increase of 4.2% sequentially and 6.5% on a
Y-o-Y basis. We believe the uptick in disbursements shall continue enabling further growth in
our business assets.
 Collection efforts continued to be intensive resulting in achieving the best ever collection
efficiency of 94% during the first quarter. In addition, timely repossessions / settlements and
accelerated write-offs has limited the increase in Gross Stage 3 (GS-3) from 7.7% as at March
end to 8.0% as at June end. Simultaneously, Stage 2 showed a decline sequentially from
14.3% to 11.7% at June end.
 As a prudent policy, the Company continues to maintain 100% provisions on those loan
contracts which have an ageing above 18 months. Consequently, the management overlays
now stand at Rs. 1,060 crores as on June 30, 2022.
 As of June 2022, the provision coverage for Stage 3 assets was healthy at 58.1%, well ahead
of the model provisions. In effect, the Net Stage 3 was at 3.5% as on 30 June 2022.
 At the end of first quarter, the restructured loans stood at Rs. 3,591 Crore a decline from Rs.
4,019 Crore as of 31st March 2022.
 The Company has initiated focused efforts to contain NPAs based on IRACP norms
scheduled to be effective from Oct 2022.

Subsidiaries
Mahindra Rural Housing Finance Limited (MRHFL)
During the quarter ended June 30, 2022, MRHFL registered income at Rs. 329 Crore as against
Rs. 334 Crore during the corresponding quarter last year, a decline of 1.5% over the
same period previous year. MRHFL registered a PAT of Rs. 2.4 Crore for the current quarter, as
against Net Loss of Rs. 65.4 crore during the corresponding quarter last year.
MRHFL has cumulative management overlay of Rs. 51.7 Crores as on June 30, 2022.
Mahindra Insurance Brokers Limited (MIBL)
During the quarter ended June 30, 2022, MIBL registered income at Rs. 89 Crore as against Rs.
60 Crore during the corresponding quarter last year, a growth of 48% over the same period
previous year. The Profit After Tax (PAT) registered was Rs. 2.2 Crore during the quarter ended
June 30, 2022, as against Rs. 3.5 Crore during the corresponding quarter last year, a de-growth
of 36% over the same period previous year.
Mahindra Manulife Investment Management Private Limited (MMIMPL)
During the quarter ended June 30, 2022, MMIMPL earned total income of Rs. 7.9 Crore as
compared to Rs. 8.7 Crore in the same period previous year. MMIMPL incurred a loss of Rs.
10.8 Crore compared to a loss of Rs. 5.1 Crore during the same period of the previous year.
The Average Assets under Management (AUM) of MMIMPL as on June 30, 2022, stood at Rs.
9,223 Crores across 19 schemes, an increase of 63% over the same period previous year. Of
these assets, the Company managed Rs. 6,330 Crores of average equity assets in the quarter
year ended June 30, 2022, a growth of 124% compared to Rs. 2,832 Crores in the same period
last year.
Mahindra Manulife Trustee Private Limited (MMTPL)
During the quarter ended June 30, 2022, MMTPL earned total income of Rs 0.2 Crore
compared to Rs. 0.1 Crore during the same period previous year. MMTPL made a profit of Rs.
0.1 Crore during the current quarter compared to a breakeven (no profit / no loss) position
during the same period of the previous year.

Mahindra Ideal Finance Limited (MIFL)
During the quarter ended June 30, 2022, MIFL registered income at LKR 396.5 Million as against
LKR 265.3 Million during the corresponding quarter last year, registering a growth of 49% over the
same period previous year. The Profit After Tax (PAT) during the quarter ended June 30, 2022,
was LKR 14.4 Million as against LKR 58.9 Million during the corresponding quarter last year, a
decline of 76% over the same period previous year.
MIFL and the Company are closely tracking the macro-economic turbulence in Sri Lanka.
Necessary steps are being taken to safeguard the business, asset quality and ensure adequate
liquidity
Mahindra Finance USA (MFUSA)
During the quarter ended June 30, 2022, MFUSA registered income at USD 14.6 Million as
against USD 14.7 Million during the corresponding quarter last year, registering a marginal
decline of 1% over the same period previous year. The Profit After Tax (PAT) during the quarter
ended June 30, 2022, registered was USD 4.5 Million as against USD 5.2 Million during the
corresponding quarter last year, registering a decline of 13% over the same period previous year.