M&M Financial - Fails To Surprise Positively In (Otherwise) Seasonally Strong Quarter: ICICI Securities
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M&M Financial - Fails To Surprise Positively In (Otherwise) Seasonally Strong Quarter: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

We had expectations from Mahindra and Mahindra Financial Services Ltd. of incremental signals on company treading a path towards normalisation.

Especially, when Q4 is historically strong (seasonally), and peers reported lower stress and growth uptick.

To our disappointment,

  1. stress pool (stage-two/three assets) remained elevated at 21.5% (albeit down from 24%; not descending to our liking);

  2. credit cost settled higher at 5.6% for Q4 FY21/FY21 (with an endeavour to contain net stage-three below 4%); and

  3. disbursements were down 15% year-on-year in Q4 FY21 and more than 40% in FY21 leading to 5% YoY contraction in assets under management.

The near-term outlook, too, is not encouraging with disruption due to Covid-19 resurgence likely to prolong phase towards normalisation.

Click on the attachment to read the full report:

ICICI Securities M&M Financial Q4FY21 Results Review.pdf

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