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Mahindra FinanceSees Strong Turnaround in Demand, Festive Season to Drive Company’s Growth

Mahindra FinanceSees Strong Turnaround in Demand, Festive Season to Drive Company’s Growth 1

Mumbai, 03 September, 2021:Mahindra Finance, part of the Mahindra group, and one of India’s leading non-banking finance company focused on rural and semi-urban sector expects loan disbursement to be high this year compared to previous years. The company anticipates volumes to pick up for auto loans, tractors, pre-owned vehicles.Mahindra Finance sees disbursements on growth trajectory while NPAs [non-performing assets] to have a declining trajectory. 

Ramesh Iyer, Vice-Chairman & Managing Director, Mahindra Finance said:“Even during this pandemic, we didn’t see too many cancellations, but dealerships were closed. With the opening-up in June, we did see volumes pick up and it continued in July. Normally, July and August are not great months for vehicle purchase as people wait for the festival season. There could also be pent-up demand from the first quarter of the current financial year. We hope that there is no severe third wave and with a good monsoon, one could expect both September and October to do well, especially as infrastructure work gathers pace. With both of that happening, it could be a good buoyant story from a rural perspective”.

During the month of July 2021, the Mahindra Finance saw macro sentiments turning positive with normalcy returning. The disbursement during the month at ~ Rs. 2,400 Crore, more than doubled over a smaller base of July 2020. The collection efficiency further improved to ~95%, up from ~90% in June 2021. The company expect the trend to be holding up, the sentiments are seen pretty positive, people are back on the streets performing their activity in most parts, we are witnessing bounce back of collections very clearly.

Ramesh Iyer, Vice-Chairman & Managing Director, Mahindra Financesaid “From our point of view, it’s important to capture three areas for further growth. We have created a very strong SME [small and medium-sized enterprises] vertical, where we are working with a large Mahindra ecosystem, and other OEM [original equipment manufacturer] ecosystem, where we will support suppliers for their capex or working capital requirements. We have chosen three industries to work with — auto, agriculture and engineering — where we think there is a lot of play for SME players”

Mahindra Financein the vehicle segment sees, pre-owned vehicles to be a good growth segment. As infrastructure opens up, tractor volumes are expected to pick up. Many OEMs in cars are also reaching out to rural markets with their launches and that can become a natural synergy for the company to gain volume. Mahindra Financeexpect the leasing business in the next three years will become a prominent play. The company have set up a digital finco for small-ticket consumer durable and personal loans. While the company have done some loans, going forward one can expect to see a lot of aggression in this business.

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