M&M Financial expects next 6 months to be better; believes worst is behind
M&M Finance is on the radar after its Q2 earnings. The company has seen disbursals improve this quarter, but loan growth has come in at an 18-quarter low. “Do not see a spike in NPAs going forward,” said Ramesh Iyer, vice chairman & managing director at Mahindra & Mahindra Financial.
M&M Finance is on the radar after its Q2 earnings. The company has seen disbursals improve this quarter, but loan growth has come in at an 18-quarter low. “Do not see a spike in NPAs going forward,” said Ramesh Iyer, vice chairman & managing director at Mahindra & Mahindra Financial.
He also spoke about trends in terms of collections, repayments, and pockets where stress still exists.
Talking about NPAs Iyer said, “In our case at least NPA number would be just about half a percent of the total. It is not all contracts which were non-classified and plus we had made matching provision as though they were NPA even though they were not classified NPA.”
“Earlier crop, farm cash flow was pretty good and the rural sentiments were positive, we are seeing collections from moratorium accounts. Our collection efficiency for the September month has been 90 percent plus, for the quarter has been 82 percent plus. So rural cash flows have held up pretty good.”
Iyer further said, “We have gone through the worst six months of the rural market along with the COVID impact and we have sailed through it well. I would imagine the next six months with this monsoon being good, harvest will be good therefore the farm cash flow once again will be good. We are pretty confident that the cash flows will look good for the next six months.”
Talking about stress segments he said, “There are some segments whether it is the taxi aggregator, the heavy commercial vehicle goods carrier, and the school bus operations, these segments we believe will take longer and those are the ones which may possibly come up for restructuring.”
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First Published: Oct 27, 2020 4:11 PM IST
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