Mahindra & Mahindra Financial Services (M&MFIN) Q4 98/99 earnings summary

Executive summary

• FY99 disbursements rose 67% to Rs 505 crore despite a slowdown in the automobile industry and difficult NBFC conditions; income grew 30% to Rs 95.30 crore.

• Expanded rural and semi-urban reach, focused on Mahindra vehicles and tractors, and began a pilot retail tractor-finance program.

Financial highlights

• Income from operations was Rs 9,530.32 lakh versus Rs 7,312.41 lakh in FY98; finance costs were Rs 4,367.15 lakh versus Rs 3,760.56 lakh.

• PBT rose to Rs 1,070 lakh from Rs 977.41 lakh; PAT fell to Rs 452.80 lakh from Rs 478.41 lakh, mainly due to higher tax provision and discontinued lease finance qualifying for 100% depreciation.

• Total assets increased to Rs 57,093 lakh from Rs 42,514 lakh; net worth was Rs 6,873.24 lakh versus Rs 5,272.56 lakh.

Outlook and guidance

• FY00 business growth budgeted above 25%, supported by recovering vehicle retail sales and a strategy to support promoter-product sales.

• Retail tractor finance was planned for gradual expansion after positive feedback from a pilot in selected areas.

• RBI reduced CRR from 10.5% to 10% in April 1999; bank rate remained 8%, while banks had only marginally reduced lending rates and NBFC funding remained constrained.