Mahindra Finance Navigates Profits Amid Market Challenges

Mahindra Finance, a non-bank lender, reported a decline in standalone profit to Rs 563 crore in the March quarter. Despite this, the company's FY25 post-tax profit surged by 33%. Growth in net interest income and loan book was offset by rising credit costs and narrowing interest margins.

Mahindra Finance, a prominent non-bank lender, announced a 9% decrease in standalone profit, amounting to Rs 563 crore during the March quarter. The financial services division of the Mahindra Group had reported a net profit of Rs 619 crore in the same quarter last year.

For the fiscal year 2025, Mahindra Finance witnessed a remarkable 33% increase in post-tax profit, reaching Rs 2,345 crore, compared to Rs 1,760 crore in FY24. The company's core net interest income saw a 9% rise, totaling Rs 2,156 crore, driven by a 17% growth in the loan book. However, the interest margin contracted to 6.5% from the previous 7.1%.

While overall disbursements increased by 2% during the recent quarter, provisions or credit costs surged by 34%, amounting to Rs 457 crore, impacting the bottom line. On the asset quality front, the GS2+GS3 ratio stood at 9.1%, with stage 3 at 3.7%. The firm maintained a comfortable capital adequacy ratio of 18.3% and a liquidity buffer of Rs 10,400 crore.

(With inputs from agencies.)