Due to weak Q4FY21 results, M&M Finance tumbles by over 8 per cent

Mahindra & Mahindra Financial Services Ltd witnessed a strong dip of 8.75 per cent on Monday. The company had recently announced its quarterly results and reported a decline in financials of the last quarter of FY21. 

The interest income dipped by 3.14 per cent whereas total income declined by 3.24 per cent. Its net profit for the quarter also decreased by around 8 per cent for the fourth quarter of FY21. The second wave of Coronavirus led to lower demand in the auto industry. Reduction of demand in the auto sector, in turn, put pressure on the auto finance providers like M&M Finance. 

The stock was seen trading in negative territory as the sliced demand in heavy commercial  vehicles business led to lower loan disbursements in that particular quarter. In the auto sector, especially demand for commercial vehicles is predicted to revive by the second quarter of 2021-22. The rural sentiment is also sensed to improve around the second quarter of 2021-22. The company records to have made sufficient provisions on the balance sheet to survive through these hard times. 

The product portfolio of M&M Finance consists of vehicle finance, which includes financing of passenger vehicles, utility vehicles, tractors, commercial vehicles, construction equipment; and pre-owned vehicles along with SME finance, which includes project finance, equipment finance, working capital finance and bill discounting services to SMEs.