Mumbai, July 23, 2007:

Mahindra & Mahindra Financial Services Ltd (Mahindra Finance), part of the $ 4.5 billion Mahindra Group and a leading player in providing financial services in the rural and semi-urban markets, has posted a 21% rise in PBT to Rs. 32.25 Crore from Rs 26.67Crore in the corresponding period last year. PAT rose 11% to Rs 21.44Crore in Q1 from Rs 19.23Crore during the same period last fiscal. This performance was achieved despite the prevailing market conditions of higher interest rates and concerns of lower buying from customers.

The first quarter income jumped 52% to Rs 250.48Crore compared to Rs. 165.00 Crore. The overall performance was enhanced due to increase in the number of cases dealt in this period. Despite concerns over the tightening market conditions, demand in the rural markets remained strong. Moreover, the monsoons have also helped maintain demand in the predominantly agrarian markets of the country.

Mr. Ramesh Iyer, Managing Director, Mahindra & Mahindra Financial Services Ltd. said,

"The first quarter performance is in line with our expectations. Despite a higher interest rate regime, customers have shown confidence in our products and the rise in volumes validates this. Financing of PTL tractors and Logan cars, along with an increase in financing of tractors and non-M&M vehicles has played a key role in this quarter. Besides the rural areas, semi-urban markets have also begun to add significantly to our business. This would be crucial to our performance during 2007-08.Moreover, during the year the Company has undertaken nationwide branding exercise to position Mahindra Finance as a strong rural and semi- urban brand”

Mr. V. Ravi, Chief Financial Officer, Mahindra & Mahindra Financial Services Ltd. said,

"The increase in interest rates was partially offset by subvention from select manufacturers thereby encouraging the customers to make their purchases. This is clearly visible in the topline growth in the first quarter. As a matter of practice we also diversify our resources to lessen any adverse impact.”

MMFSL has increased its network during Q1 to 415 branches in a bid to reach out to more customers. The existing product portfolio is being enhanced, besides adding newer products as part of the company’s customer centric approach.

About Mahindra & Mahindra Financial Services Ltd

Mahindra & Mahindra Financial Services Ltd (Mahindra Finance) is one of India's leading non-banking finance companies focused on providing finance for utility vehicles, tractors and cars in the rural and semi-urban sector. Mahindra Finance is a subsidiary of Mahindra & Mahindra, a leading tractor and utility vehicle manufacturer. The company has positioned itself between the organized banking sector and local moneylenders, offering customers competitive, flexible and speedy lending services and has customized packages for customers’ every need. Mahindra Finance has a network of over 400 branches covering more than 80% of the districts in India. It has entered into more than 600,000 customer contracts and has disbursements of around Rs. 21000crore since inception. Almost all the top mutual funds in the country have reposed their trust in the company and have invested in it. Mahindra Finance listed on National Stock Exchange of India Limited and Bombay Stock Exchange Ltd. on March 17, '06.

For further information please contact:

Ms. Roma Balwani Sr. GM-Head, Corporate Communication Mahindra & Mahindra Ltd. Phone: 2497 5176 Fax: 2490 0830 Email: : balwani.roma@mahindra.com

Mr. D Satyanarayan Adfactors PR Pvt Ltd. Tel: 2281 3565 Extn: 209 Fax: 2281 3569 Email: satyanarayan.d@adfactorspr.com