Earning Review
M&M Fincl PAT dn 10% YoY on higher provisions, one-time cost
This story was originally published at 20:48 IST on 28 January 2026
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--M&M Fincl Oct-Dec net profit INR 8.10 bln
--Analysts saw M&M Fincl Oct-Dec net profit at INR 7.36 bln
--M&M Fincl Oct-Dec net profit INR 8.10 bln vs INR 8.99 bln year ago
--M&M Fincl Oct-Dec revenue INR 47.54 bln vs INR 41.43 bln year ago
--M&M Fincl Oct-Dec net profit includes one-time cost INR 1.17 bln
--M&M Fincl: One-time cost of INR 1.17 bln in Q3 due to new labour codes
--M&M Fincl Oct-Dec profit excluding exceptional cost INR 9.28 bln
--M&M Fincl Apr-Dec net profit INR 19.09 bln vs INR 17.82 bln year ago
--M&M Fincl Apr-Dec revenue INR 136.46 bln vs INR 117.78 bln year ago
--M&M Fincl gross stage 3 asset ratio 3.80% on Dec 31 vs 3.94% qtr ago
--M&M Fincl net stage 3 asset ratio 1.82% on Dec 31 vs 1.89% qtr ago
--M&M Fincl capital adequacy ratio at 19.82% as on Dec 31
--M&M Fincl provision coverage ratio for stage 3 assets at 53.02% on Dec 31
--M&M Fincl liquidity coverage ratio at 293% on Dec 31
By Shweta
MUMBAI – Mahindra & Mahindra Financial Services Ltd. reported a significant year-on-year fall in its net profit for the December quarter on substantially higher provisions and one-time costs. However, the bottom line rose sharply in the quarter, exceeding the analysts' expectations by a wide margin.
The vehicle financier's net profit fell nearly 10% on year to INR 8.10 billion for the reporting quarter. The net profit grew by over 42% on quarter. The brokerages had estimated the bottom line to be at INR 7.36 billion for the quarter. The company's net profit was dented by one-time costs of INR 1.17 billion for the incremental impact of gratuity and leave encashment provisions in view of the implementation of new Labour Codes.
The company's total revenue from operations for the quarter rose nearly 15% on year and over 6% on quarter to INR 47.54 billion. Fees, charges and commission income increased nearly 70% year-on-year to INR 2.48 billion.
The company reported total expenses at INR 35.75 billion, up nearly 22% and down over 4% sequentially for the December quarter. Within this, the company made provisions of INR 4.70 billion for financial instruments in the December quarter. The impairment on financial instruments was INR 91.4 million in the year-ago quarter. Depreciation, amortisation and impairment grew nearly 22% year on year and nearly 3% sequentially to INR 855 million in the reporting quarter. The company made write-off provisions of INR 6.28 billion during the December quarter.
Mahindra & Mahindra Financial's net interest income, including dividend and other income, rose 27% on year and 10% on quarter to INR 26.51 billion for the December quarter. This exceeded the Street's estimate of INR 22.86 billion. The company's total income grew to INR 47.63 billion, up nearly 15% on year and above 6% on quarter, for the reporting quarter.
The financier reported disbursements for the December quarter at INR 176.12 billion, up 7% on year and 30% on quarter. The lender's gross loan book grew 12% on year and 1% on quarter to INR 1.29 trillion till December end. Within this, disbursements for passenger vehicles rose 1% on year to INR 71.02 billion and tractors increased 65% on year to INR 32.42 billion. Loans to the three-wheeler segment declined 23% on year to INR 5.32 billion and for commercial vehicles fell 11% year-on-year to INR 29.66 billion.
Mahindra & Mahindra Financial's gross stage 3 asset ratio was 3.80% as of Dec. 31, down from 3.94% at the end of the September quarter. The net stage 3 asset ratio was 1.82% of Dec. 31, against 1.89% on Sept. 30.
The company's credit cost was 1.3% as of Dec. 31, 2025. The non-banking financial company's net interest margin expanded nearly 50 basis points sequentially for the reporting quarter to 7.5%. "NIM expanded YoY (year-on-year) during the quarter, supported by higher fee income and lower cost of funds," the company said in the press release.
The company reported a capital adequacy ratio of 19.8% and the provision coverage on Stage 3 loans was 53% as of Dec. 31.
During Apr-Dec, the company's net profit grew over 7% on year to INR 19.09 billion and total revenue from operations rose nearly 16% to INR 136.5 billion.
Wednesday, shares of Mahindra & Mahindra Financial closed 1.7% higher on the National Stock Exchange at INR 370.15. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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