Company Update : Mahindra Finance Ltd By Motilal Oswal Financial Services Ltd
Business volumes largely in line; collection efficiency weaker YoY
Key takeaways from 4QFY25 business update:
* 4QFY25 disbursements stood at INR154.8b, growing 1% YoY. FY25 disbursements stood at ~INR578.5b, growing ~3% YoY.
* Gross business assets as of Mar’25 stood at ~INR1.19t, up 16% YoY/4% QoQ.
* 4QFY25 CE stood at 97% (PY: 98% and PQ: 95%). FY25 collection efficiency stood at 95% (vs. 96% in FY24).
* MMFS reported that its Stage 3 is estimated at 3.7% (PQ: 3.9%) and Stage 2 is estimated at 5.5% (PQ: 6.3%).
* As of Mar’25, MMFS maintained a comfortable liquidity position with a liquidity chest of ~INR100b.
Our view: Disbursements and loan growth were largely in line with expectations, though with a weakness bias. Asset quality reported by MMFS suggests that credit costs in the quarter could be elevated, ranging between 1.7% and 1.8% (as a % of average business assets)
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