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Below is quote on M&M Financial services Q1FY22 results by Mr. Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd   

M&M financial services Ltd reported numbers that were significantly below estimates due to sharp deterioration in asset quality NII for the quarter was down by 15.8% yoy to Rs. 1158 crore. Operating expenses for the quarter was up by 21.6% yoy to Rs. 420 crore which led to a 28.3% yoy decline in net profits to 749 crore. Provisions & write-offs for the quarter witnessed a significant jump of 234.5% yoy to Rs. 2,819 crore due to sharp deterioration in asset quality. As a result the company posted a loss of Rs. 1,529 crore for the quarter. Asset quality witnessed significant deterioration during the quarter as GNPA and NNPA rose sharply to 15.46% and 7.81% from 9.19% and 5.72% in Q4FY21. M&M financial services has been one of the worst impacted companies due to the second Covid wave given the company’s exposure to the Auto/Utility Vehicle segment. While we believe that the worst is over for the company in terms of NPA recognition it will take at least a few quarters for the asset quality stress to abate and growth to come back. Hence we have a neutral rating on the stock.

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