Financial Daily from THE HINDU group of publications
Sunday, Aug 04, 2002

Investment World
Features
Stocks
Port Info
Archives

Group Sites

Investment World - Fixed Deposits
Money & Banking - NBFCs


M&M Financial Services — Running well

Sowmya Krishnan

THE fixed deposit programme of Mahindra and Mahindra Financial Services is an attractive option. Interest rates are quite attractive.

On a stand-alone basis, its performance has been quite good.

MMFSL, a subsidiary of Mahindra and Mahindra (M&M), accepts only cumulative deposits.

It offers 9.25 per cent for 12 months, 9.75 per cent for 18 months, 10.25 per cent for 24 months and 10.75 per cent for 36 months.

The cumulative effective annual yield works out to 9.25 per cent, 10.07 per cent, 10.78 per cent and 11.95 per cent respectively for the same tenures.

Minimum deposit amount is Rs 10,000. Further information can be obtained from its registered office at Gateway Building, Apollo Bunder, Mumbai — 400 001.

MMSFL provides hire-purchase finance, primarily for utility vehicles and light commercial vehicles. It mainly caters to the dealers and customers of Mahindra and Mahindra.

But, of late, it has also been financing non-M&M products and vehicles sold in the secondary market.

Flush with funds from IFC (it has received a Rs 84-crore long-term loan from IFC at an interest rate of around 10 per cent), it plans to further expand its business and foray into new businesses such as distribution of insurance products.

Despite a tough phase that its parent is going through, MMSFL was able to increase its disbursements 17 per cent to Rs 1,166 crore for 2002.

Its income form operations rose 38 per cent to Rs 191.34 crore and net profit, 188 per cent to Rs 27.72 crore.

One notable aspect is the sizeable reduction in finance charges.

For the year ended March 2002, finance charges accounted only 38.9 per cent of its revenues as against 47.47 per cent in the previous year. This expanded its margins 22.7 per cent in 2002 (14.75 per cent).

Its main strength is its dealer network, which further expanded during the year to 151 outlets.

The capital-to-risk assets ratio at 17.05 per cent on March 2002 (15.4 per cent) provides a good cushion for further growth without fresh equity expansion.

This gives the company considerable flexibility in planning its fund base.

Though the automobile sector is a cyclical one, investors can go for all the options available.

Though the three-year option carries a higher degree of risk, it may be worth it due to the returns on offer.

Send this article to Friends by E-Mail

Stories in this Section
`Speed-e' and secure trading


Bearings industry: Friction free?
Outlook for bearings hinges on volume expansion
Bearings cos: How do they stack up?
Global majors' entry and imports to drive supply
`We are confident of gaining market share' — Mr Trilochan Singh Sahney, CMD, NRB Bearings
DSP Merrill Equity: Sell
Flows in June: UTI-pvt MFs gap narrows
IDBI Principal Equity Fund: Hold
Pioneer Taxshield: Hold
UTI MIPs: Seeking capital
Sundaram Gilt Fund: Avoid
Dr Reddy's Laboratories: Buy
Madras Cements: Sell
ABB: Hold
Balaji Telefilms: Hold
Thermax: Buy
CG Igarashi: Strong fundamentals
Breathing time to review your policy
Positive near-term outlook for HLL
Markets last week: On a tight leash
Nasdaq: Optimism fizzles out
High volumes, low liquidity
Trim holdings in Polaris
Kodak gains on open offer announcement
Tata Engineering, BPCL remain active
In-the-money covered call: A better option
Futures guide
Options guide
M&M Financial Services — Running well
`Disciplined process makes a big difference' — Mr Nilesh Shah, CIO, Templeton India Asset Management Company
Tax concessions: Token gestures, potent threat
Dividends and FDs
TDS & exemptions
Losses inevitable in restructuring
Cleaning up the UTI
Restructuring the US-64 — Equity still a bugbear
Giving nuclear power its due
What MRPL means to ONGC
It Adds Up!


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line