Mahindra Finance Battles Profit Dip Amidst Labour Code Impact

Mahindra and Mahindra Financial Services reported a 10% decrease in consolidated net profit for the December quarter. The decline was attributed to a new labour code, impacting Rs 97 crore. However, core net interest income rose by 27%, and the company's scrip closed higher on the BSE.

Non-bank lender Mahindra and Mahindra Financial Services reported a 10% drop in consolidated net profit for the December quarter, amounting to Rs 826 crore. This decrease is a dip from the Rs 918 crore reported in the previous year.

On a standalone basis, the firm's net profit also fell by 10%, settling at Rs 810 crore compared to Rs 899 crore in the corresponding period last year. The fall was mainly due to the implementation of the new labour code, which cost Rs 97 crore. The prior year's profit included a provision of Rs 436 crore, which, when adjusted, shows the profit after tax nearly doubled to Rs 907 crore for the quarter.

Despite the profit slump, Mahindra Finance reported a 27% growth in core net interest income to Rs 2,661 crore, driven by a 0.9% increase in NII margin to 7.5% and a 12% rise in the loan book. Their gross stage three assets stood at 3.8% of total advances, and the company's scrip ended up 1.57% on the BSE, outperforming the benchmark's 0.60% rise.