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Mah Fin.: Provisions weigh on profits

Jul 25, 2013

Mahindra Finance declared its results for the first quarter of the financial year 2013-14 (FY14). The company reported a 32% growth in income from operations while net profits have grown by 18% YoY during 1QFY14. Here is our analysis of the results.

Performance summary
  • Income from operations grows by 32% YoY in 1QFY4.
  • Loan book grows by whopping 39% YoY in 1QFY14. Value of Assets financed grows by 32% YoY.
  • Net NPA to total advances went up to 1.9% at the end of 1QFY14 (1.2% in 1QFY13).
  • Net interest margins decrease to 7.2% in 1QFY14 from 7.3% in 1QFY13 on account of higher interest costs.
  • Bottomline grows by 18% YoY during 1QFY14.
  • Cost to income ratio drops marginally to 33.2% in 1QFY14 from 33.9% in 1QFY13.
Consolidated performance snapshot
Rs (m) 1QFY13 1QFY14 Change
Income from operations 8,826 11,647 32.0%
Interest expense 3,587 4,948 37.9%
Net Interest Income 5,239 6,699 27.9%
Net interest margin 7.3% 7.2%  
Other Income 30 60 96.7%
Other Expense 1,837 2,352 28.1%
Provisions and contingencies 873 1,302 49.1%
Profit before tax 2,559 3,106 21.3%
Exceptional gains / losses
Tax 837 1,060 26.7%
Profit after tax/ (loss) 1,723 2,046 18.7%
Minority interest 3 15 385.8%
Net Profit to equity shareholders 1,720 2,031 18.1%
Net profit margin (%) 19.5% 17.4%  
No. of shares (m)   563.0  
Book value per share (Rs)*   81.7  
Price to book value (x)*   2.4  

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