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Mumbai, April 24, 2007:

Mahindra & Mahindra Financial Services Ltd (Mahindra Finance), part of the $ 4 Billion Mahindra Group and a leading player in providing financial services in the rural and semi-urban markets, has registered a rise of 28% in its profit before tax (PBT) during Q4 of FY 2006 - 07 to Rs 88.60 Crore from Rs 69.49 Crore in the same quarter of the previous year. PBT for FY2006-07 stood at Rs 202.74 Crore, up 25% from Rs 162.15 Crore in 2005-06. The company posted this performance despite tightening money market conditions.

Profit after tax (PAT) rose 22% to Rs 57.70 Crore in Q4 from Rs 47.20 Crore in the corresponding period last fiscal. MMFSL posted a net profit of Rs 132.88 Crore in for the 12 month ended March 31, 2007 compared to Rs 108.27 Crore in 2005-06. The board of directors has recommended a final dividend of 20%. With interim dividend, the total dividend for the year stands at 40%.

Mr. Ramesh Iyer, Managing Director, MMFSL said,

"During the year Mahindra Finance has been able to increase its market share in tractor financing and has also played a significant role in financing non-M&M products. As part of our growth plans we expanded our branch network to 403 outlets during the financial year. There has been an upward movement of interest rates in the 2nd half of the last fiscal, which was partially compensated by increase in lending rates. For the financial year ended March 31, 2007 our turnover rose 42% signifying the entrenched base of Mahindra Finance. Overall, the last fiscal was very encouraging for MMFSL where new products were introduced increasing the customer base. We expect that the Semi-urban and rural markets will continue to drive our growth.”

Mr. V. Ravi, Chief Financial Officer, MMFSL said,

"The long term interest rate in F 2007 went up by nearly 250 basis points. However due to prudent asset liability management and diversification of our resource base, we were able to contain the impact. Going forward, the company will pursue the dual strategy of appropriate product mix and lending rates to compensate for interest cost increase.”

MMFSL significantly increased its exposure to vehicle financing during 2006-07. In July, 2006 it formed an alliance with Maruti Udyog Ltd to provide finance to the latter’s vehicles. Mahindra Finance’s growth will also be enhanced by the various organic/inorganic initiatives of the parent company, Mahindra & Mahindra.