Mr. Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd
M&M Financial Services reported a subdued set of numbers for Q2FY21. AUM remain flat YoY/ QoQ. NII grew by 8.3% YoY which led to an improvement in NIM. NIM expansion is largely driven by the lower cost of funds. Pre provision profit jumped 25% YoY owing to controlled opex. Other expenses declined 46% YoY. Provisions increased 72% YoY due to high provisions for Covid-19 (Rs430cr) and elevated write-offs. The company holds Rs1480cr of Covid-19 provisions which is approx 2.3% of AUM. M&M Fin has reported improvement in a collection sequentially, however, potential stress books remained elevated. Around 17% of its borrowers under moratorium have not paid a single installment in the past six months. As per management there is would be a requirement of restructuring around 9% of the book. We have a neutral view considering the likely higher stressed book.
Shares of MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD. was last trading in BSE at Rs.125.65 as compared to the previous close of Rs. 130.85. The total number of shares traded during the day was 901801 in over 8806 trades.
The stock hit an intraday high of Rs. 132.8 and intraday low of 125. The net turnover during the day was Rs. 114340683.