More Stories

Informist, Thursday, Apr. 23, 2026

By J. Navya Sruthi

MUMBAI – Mahindra & Mahindra Financial Services Ltd. is set to report strong year-on-year growth in net profit for the March quarter on the back of a higher net interest margin and an increase in disbursements and assets under management, according to brokerages tracking the non-banking finance company. However, it is seen reporting weak growth on a sequential basis with the net interest income expected to fall from the December quarter.

Analysts expect lower credit cost and higher disbursements to support the company's net interest income and margin. According to JM Financial Institutional Securities, the vehicle financier's net interest margin is seen at 8% for the reporting quarter, up from 7.3% in the March quarter a year ago.

The company's credit cost is seen at 1.4-1.5%, down from 1.6% in the year-ago period, according to reports by Motilal Oswal Financial Services and JM Financial. Lower credit cost supports the net interest income, helping the company to report higher profit.

Similarly, disbursements by the company were up 11% on year in the March quarter at INR 171.80 billion, according to a business update it gave. This resulted in a 12% on-year rise in its assets under management to INR 1.34 trillion as on Mar. 31.

The vehicle financier's net profit for the reporting quarter is expected to jump 54% on year to INR 8.65 billion, according to an average of estimates from 11 brokerages. Kotak Securities has the highest estimate for the net profit at INR 10.34 billion while Nirmal Bang Equities has the lowest at INR 6.94 billion. The company will detail its March quarter earnings Friday.

Some analysts expect the lender's net interest margin to decline on a quarterly basis. Motilal Oswal sees the margin falling by 20 basis points to 7% in the March quarter. According to the average of estimates, the net profit is likely to fall nearly 7% on quarter from INR 9.28 billion in the December quarter.

Most broking firms expect the lender's net interest income to rise sequentially and annually because of the lower cost of credit. Motilal Oswal expects the credit cost to decline to 1.4% in the March quarter from 1.5% in the previous quarter. However, JM Financial expects credit cost to remain unchanged on quarter at 1.5%.

The company's net interest income--the difference between interest earned and paid--for the reporting quarter is likely to have risen 26% on year and 5.4% on quarter to INR 24.29 billion, according to the average of estimates. The net interest income had risen 27% on year to INR 26.51 billion in the December quarter.

"...While disbursement growth has improved, the AUM (assets under management) growth continues to decelerate," YES Securities said in a report. "Interactions suggest no impact in March (quarter) on collections front, and the seasonal pull-back in asset quality is likely to be better than that witnessed in Q4FY25. Hence, credit cost is estimated to decline meaningfully on a sequential basis."

Nirmal Bang said in its report that the company's shift from "wheels to non-wheels", which includes lending to small and medium enterprises and personal loans, has helped the financier to diversify its yield profile and reduced the original equipment manufacturer concentration risk. Those non-banking finance companies engaged in vehicle, equipment, or supply chain financing face the risk of potential financial, operational, or credit losses from their dependency on specific manufacturers.

Moving ahead, investors will focus on the company's commentary on the impact of the military conflict on economic activity. They will also monitor the management's forward-looking comments on margins, credit costs, and loan growth.

Shares of M&M Financial have fallen nearly 20% since the company declared its earnings for the December quarter on Jan. 28. Thursday, the stock closed over 1% lower at INR 297.05 on the National Stock Exchange. 

Brokerages have a largely positive view on the stock, with 10 giving a "buy" recommendation with an average target price of INR 399 per share, up over 34% from the current price. Three brokerages have a "hold" recommendation with an average target price of INR 377. Only one recommends selling the stock with an average target price of INR 320 a share.

Following are the Jan-Mar earnings estimates, in INR billion, for Mahindra & Mahindra Financial Services from 11 brokerages in descending order of the estimate of net profit:

End

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.