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M&M Fin Q3 profit up on robust rural demand

M&M Fin Q3 profit up on robust rural demand
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First Published: Fri, Jan 21 2011. 07 25 PM IST
Updated: Fri, Jan 21 2011. 07 25 PM IST
Mumbai: Mahindra & Mahindra Financial Services, part of the Mahindra group, reported robust growth in the December quarter from the rural and semi urban sector, a top official said.
“Overall growth has come from buoyancy in rural market in terms of cash flows concerned not only with higher disbursements but better recovery and overall NPA control,” Ramesh Iyer, managing director, said on a conference call.
The auto financier said its gross non performing assets fell to 5.3% for the Oct-Dec quarter, down from 8.3% in the corresponding year-ago quarter.
Earlier in the day, the auto lender said its net profit rose 25% to Rs117 crore, falling below Reuters poll estimates of Rs129 crore, due to an exceptional item.
During the quarter the company set aside Rs28 crore as provision of 0.25% of standard assets mandated by the Reserve Bank of India.
The profit for the quarter before exceptional items stood at Rs135 crore, up 45% from a year ago.
The auto financier expects growth momentum to continue as it increases balance sheet size by financing multi-products, Iyer said.
“We grew our balance sheet from financing non Mahindra vehicles like Maruti cars, commercial vehicles, construction equipments. We have become a dominant player in Maruti vehicle financing,” Iyer added.
The company does not see much impact from rising borrowing costs, whcih it has passed on to borrowers. The company has been able to maintain an average cost of funds at 8.4%.
It increased lending rate by 50 basis points in November and another 50 basis points starting January, Iyer added.
The company relies on long term funds and most of its borrowings are from banks.
Its disbursements for the nine months ended 31 December grew 69% at Rs10,456 crore and total assets under management stood at Rs13,000 crore.
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First Published: Fri, Jan 21 2011. 07 25 PM IST