M&M Financial Services Q4 Review - Strengthening The Balance Sheet: Motilal Oswal
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Motilal Oswal Report
Mahindra & Mahindra Financial Services Ltd. reported net profit of Rs 1.5 billion versus our profit after tax estimate of Rs 6.2 billion.
While operating profit grew 9% YoY to Rs 10.5 billion (4% beat), higher provisions of Rs 8.9 billion (versus our expectation of Rs 1.7 billion) drove the profit after tax miss.
The increase in provisions is largely on account of one-off additional provisions of Rs 13.2 billion taken in Q4 FY21.
Net interest income/pre-provision operating profit for FY21 was up 8%/22% YoY, while profit after tax declined 63% YoY to Rs 3.4 billion.
Total credit costs stood at 6% – the highest in the past decade.
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