Mahindra & Mahindra Financial Services, a rural NBFC based in Mumbai, is likely to report good earnings in the quarter ended March 31.
- Q4 is typically good for Mahindra & Mahindra Financial Services. Looking at it from the gross non-performing asset (NPA) point of view, the gross NPA improved because it is one of the best quarters where recovery is on the higher side. So the improvement in gross NPA will be positive. In Q3 the gross NPA was at 7.7 percent.
- Loan growth above 25 percent will be positive. Last quarter it was at 30.5 percent.
- The spreads may decline: the cost of fund have increased for non-banking financial companies (NBFCs) and therefore 25-30 bps can be the decline in spreads. Last 9 months, they have recorded a spread of around 8.1 percent and management commentary on the rural market will be seen very closely.
- Our poll suggests net interest income (NII) growth of 0.5 percent year-on-year (YoY) but it will grow by 9 percent quarter-on-quarter (QoQ).