M&M Financial Q1 Review - Disbursement Run-Rate, Collections Bouncing Back: Systematix
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Systematix Research Report
Mahindra and Mahindra Financial Services Ltd. reported a loss of Rs 15.3 billion in Q1 FY22 due to higher provisions.
The management has guided for an 80-90% writeback of provisions in H2 FY22E.
M&M Financial has been prudent in recognising the credit cost upfront and provided well with its stage-III provision cover at 53.7%.
The management overlay is now at ~4.5% of assets under management.
Despite lower working days and reduced freight movement, its disbursement run-rate and collections are bouncing back to pre-Covid-19 levels.
We remain sanguine about provision write-backs and expect a disbursement run-rate of Rs 65-85 billion in FY22E.
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