The Board of Directors of Mahindra & Mahindra Financial Services Limited (Mahindra Finance), a leading provider of financial services in Emerging India, announced the unaudited financial results for the quarter ended June 30, 2024 (Q1FY25) at its meeting today. The quarter saw steady growth in Business Assets, now at ₹1,06,339 Crore, reflecting a 23% YoY increase. Disbursements were ₹12,741 Crore, marking a moderate 5% YoY growth.
Collection efficiency remained stable at 94%, consistent with the same quarter of the previous year. With a continued focus on underwriting standards and addressing early bucket delinquency, asset quality remained stable. Stage-2 and Stage-3 assets together stayed below 10%, with Stage-3 assets at 3.6%, slightly up from 3.4% as of March 31, 2024, but still within the company’s risk guardrails.
Mahindra Finance ranks among the top five NBFCs for financing three-wheelers, passenger vehicles (PVs), commercial vehicles (CVs), light commercial vehicles (LCVs), and small commercial vehicles (SCVs), and is the leading financier in the tractor segment. The company also holds a strong position in the pre-owned vehicle business.
The company is committed to expanding into new business categories. New product portfolios, such as SME lending, loan against property (LAP), and leasing (Quiklyz), are showing consistent growth potential. Additionally, Mahindra Finance has partnered with digital MSME lender Lendingkart under a co-lending arrangement to offer business loans to M/SMEs. Recognizing the growth potential within the SME sector in India, the company strategically partners with key industry stakeholders. The SME portfolio disbursement grew 68% YoY in Q1FY25.
Mahindra Finance aims to grow its non-vehicle finance segment to 15% of the AUM over the medium term while maintaining its leadership position in the wheels business in Emerging India.
During the quarter, the company obtained a corporate agency license from the insurance regulator IRDAI, allowing it to sell life and general insurance policies from various insurers. This initiative aims to offer comprehensive insurance solutions that address the evolving financial requirements of customers. The company has so far onboarded six insurance companies, with more collaborations expected in the future.
Digital transformation is a key focus for Mahindra Finance, aimed at delivering seamless customer experiences, quicker turnaround times, and enhanced self-service journeys across products. With a strong emphasis on data, AI/ML, and analytics, the transformation aims to drive hyper-personalization, enhance asset quality, and improve underwriting processes. Employee experience is central to this journey, with transformation initiatives set to roll out in phases in FY25.
Mahindra Finance, one of the few deposit-taking NBFCs, is strengthening its Fixed Deposit (FD) portfolio. The company’s FDs, with a AAA rating by CRISIL & India Ratings, are an attractive investment avenue, indicating the highest safety standards. As of June 30, 2024, FDs constituted 8.9% of total borrowings, up from 6.9% as of June 30, 2023.
The balance sheet remains strong with a capital adequacy ratio of 18.5%. Additionally, the company maintained a comfortable liquidity chest of ~₹8,216 Crore. The provision coverage on Stage-3 assets remained prudent at 59.8%.
Mahindra Finance is steadfast in upholding its brand recognition and value, consistently reinforcing its commitment to integrity, transparency, and ethical conduct through strengthened measures in compliance, risk management, and governance.
