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Informist, Tuesday, Oct. 28, 2025

--M&M Fincl: Lower cost of funds, higher fee income boosted NIM Jul-Sept 

--CONTEXT: Comments from M&M Fincl mgmt in post earnings analyst call 

--M&M Fincl: Used vehicle book to be affected due to GST cut on new vehicles 

By Kabir Sharma and Sagar Sen

MUMBAI – Mahindra and Mahindra Financial Services Ltd. expects its used vehicle portfolio to see some impact from the newly implemented goods and services tax cuts on new vehicles, Raul Rebello, managing director and chief executive officer of the company, said in an analyst call after the release of its earnings for the September quarter.

"We are clearly cognizant of the fact that with the price cut, which has happened on the new vehicle, there will be impact on the used vehicle. There are also associated risks. So we will have to calibrate all of that going forward. But is it a segment that we will continue to be invested in? The answer is yes," Rebello said.

The vehicle financier's net profit for the September quarter grew 54% on year to INR 5.69 billion. Analysts had expected the company to report a bottom line of INR 5.32 billion. On a sequential basis, the company's net profit grew almost 8%.

The management attributed the rise in net interest margin for the quarter to the low cost of funds due to lower borrowing cost from banks after the Reserve Bank of India cut the repo rate. Net interest margin was also boosted by higher fee income, the management said. "...both the dividend income as well as the fee based income is creating an expansion into our overall income by average assets. The other big lift in terms of NIM has come from clearly COF (cost of funds), which has moved both quarter and quarter and year by 30 bps (basis points)," Rebello said.

The non-banking financial company reported a 50 bps year-on-year improvement in net interest margin for the quarter to 7%. The income from fees, charges, and commissions grew over 70% on year and nearly 23% sequentially to INR 1.96 billion. Its dividend income for the quarter rose more than threefold on year to INR 536.1 million. On a sequential basis, the dividend income was up 16%.

Tuesday, shares of Mahindra & Mahindra Financial closed 0.3% higher on the National Stock Exchange at INR 299.90. The company announced its results after market hours.  End

Edited by Ashish Shirke

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