Shares of Mahindra & Mahindra Financial Services dropped on Tuesday following the company’s announcement that it had postponed a board meeting scheduled for April 23 to review and approve its financial results.
What Happened: The postponement was due to the detection of financial fraud at the end of the fourth quarter of the fiscal year ended March 31, 2024.
The company detected the fraud at one of its branches in the North East, involving retail vehicle loans. The fraud included forged KYC documents and led to the embezzlement of company funds.
The management reported that investigations are at an advanced stage, with the financial impact estimated not to exceed ₹150 crores. Several individuals involved have been arrested, and the company has identified and is implementing corrective actions.
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Due to this incident, the company decided to defer its board meeting to a later date to approve the March quarter results.
For the October-December quarter, Mahindra Finance reported a 12% year-on-year decline in net profit to ₹553 crore, down from ₹629 crore in the same quarter the previous year, primarily due to a significant rise in credit costs.
However, there was a 135% sequential increase in profit from ₹235 crore in the second quarter of FY24. The company’s net interest income rose by 10% to ₹1,815 crore, and disbursements increased by 7% to ₹15,436 crore compared to the previous year.
Price Action: Mahindra & Mahindra Financial Services Ltd. shares were down 3.05% at ₹270.35 on Tuesday morning.
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