Mumbai: Mahindra & Mahindra Financial Services reported a 10% year-on-year fall in profit in the quarter to March amid a sharp rise in provisions and higher finance costs.
Standalone net profit fell to ₹619 crore in the quarter from ₹684 crore a year ago, largely as total provisions increased to ₹341 crore in March 2024 from just ₹38 lakh in the quarter ended March 2023, results released late Saturday night showed.
Net profit for the full year fell 11% to ₹1,760 crore in the year ended March 2024 from ₹1,984 crore a year ago.
Provisions increased because the company had to set aside ₹136 crore to cover for losses from a fraud in its branch in Aizwal in Mizoram, where close to 3,000 accounts were identified as potentially fraudulent.
The discovery of the fraud forced the company to postpone the announcement of results, which was originally scheduled for April 23. It has led to analysts questioning whether the company could achieve its targets like a 2.5% return on assets .
A sharp rise in finance costs largely due to higher interest rates also hit M&M Finance’s results. Finance costs rose 30% to ₹1,735 crore from ₹1,334 crore a year ago.
Loan growth remained strong with total assets increasing 24% year-on-year to ₹1.02 lakh crore. Disbursements during the fourth quarter increased by 11% to ₹15,292 crore.
