Mahindra & Mahindra Financial Services (M&MFIN) Q4 00/01 earnings summary

Executive summary

• FY01 disbursements rose 32% to Rs.1,001 crore, income grew 17.12% to Rs.138.87 crore, and PAT increased 77.63% to Rs.9.61 crore despite a 7.6% decline in automobile-industry growth.

• Business expanded to 76,663 contracts and 128 branches; total assets reached Rs.1,115.16 crore.

Financial highlights

• FY01 operating income was Rs.138.87 crore vs Rs.118.57 crore; PBT was Rs.20.47 crore vs Rs.13.46 crore, and PAT was Rs.9.61 crore vs Rs.5.41 crore.

• Finance costs rose to Rs.65.89 crore from Rs.58.75 crore; depreciation declined to Rs.17.90 crore from Rs.20.31 crore.

• Proposed equity dividend was 8%; total payout including tax was Rs.5.34 crore vs Rs.2.93 crore in FY00.

Outlook and guidance

• FY02 disbursements were planned to exceed Rs.1,100 crore, mainly financing Mahindra vehicles and tractors; borrowing authority was proposed to increase to Rs.1,500 crore.

• Management expected interest rates to remain steady, with a softening bias, assuming inflation remained at current or lower levels.

• The proposed 5% service tax on banking and financial services, leasing and hire purchase awaited clarification on computation and legislative approval.