HomeEarnings NewsDisbursals to pick up in Q4; long-term restructuring seems unlikely, says MMFSL

Disbursals to pick up in Q4; long-term restructuring seems unlikely, says MMFSL

M&M Financial Services (MMFSL) slumps in trade on the back of a weak Q3 as the company reported a net loss and weakest AUM growth in 19 quarters. Ramesh Iyer, Vice Chairman and Managing Director of the company discussed the earnings and the outlook for 2021.

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By Mangalam Maloo   | Nigel D'Souza  January 29, 2021, 2:15:32 PM IST (Updated)

Disbursals to pick up in Q4; long-term restructuring seems unlikely, says MMFSL
M&M Financial Services (MMFSL) slumps in trade on the back of a weak Q3 as the company reported a net loss and weakest AUM growth in 19 quarters. Ramesh Iyer, Vice Chairman and Managing Director of the company discussed the earnings and the outlook for 2021.


“In terms of disbursements, we definitely look at the growth over the Q4 of last year as compared to degrowth that we have seen in first three quarters,” he said.

“The loan book range will still be between 8 percent and 10 percent, but if the disbursement starts to pick up then the loan book will start to pick up over the period of time. One could see a disbursement growth in Q4 to be much better than three quarters,” he said.

M&M Financial Services’ rural sentiments are positive, the cash flows are improving.

The company had announced the restructuring programme thinking that the customers may not be able to service their loan on a month-on-month (MoM) basis. However, now the customers are saying that they may not require the long-term restructuring.

“We have reached out to our customers and very interestingly the customers are saying since we have started servicing the loan, we may not require a very long-term restructuring,” he mentioned.

“We have accepted that they don’t need the restructuring and we have lived with a higher provision in this quarter. As we move into the next quarter, you would see a substantial reversal of this happening as the cash flow starts to come in,” he said.

Company’s net non-performing asset (NPA) levels for Q3FY21 is exactly at the level of Q3FY20.

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