India · Delayed Price · Currency is INR Mahindra & Mahindra Financial Services Earnings Call Transcripts
Fiscal Year 2026
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Q4 FY26 saw strong profitability, margin expansion, and asset quality improvement, with PAT up 55% YoY and robust digital/AI adoption. Management remains cautious with overlays for macro risks, targets 16%-18% medium-term growth, and aims for 15% ROE.
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Profitability and asset quality improved with Q3 ROA at 2.5% and GS3 at 3.8%. Tractor finance led growth, fee income rose, and credit costs are expected to remain within 1.5%-1.7%. Diversification into mortgages and SME is underway.
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Q2 FY26 saw strong growth in tractor finance, stable asset quality, and improved NIM, with management maintaining a 1.7% credit cost guidance for the year. Diversification and fee-based income contributed to performance, and H2 is expected to benefit from GST and festive demand.
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Q1 FY26 delivered stable results with 3% PAT growth and steady asset quality, driven by strong tractor lending and improved fee income. Management targets mid-teen growth in the medium term, supported by a robust capital base and digital transformation.
Fiscal Year 2025
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Mild to moderate disbursement growth and stable asset quality marked FY25, with NIMs compressed to 6.5% due to higher funding costs. Management targets mid to high teens growth over the medium term, with a focus on expanding non-wheels business to 25% of AUM and improving margins as cost of funds decline.
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Q3 FY25 saw stable performance with 25% sequential disbursement growth, NIM at 6.6%, and a sharp provision relief driving PAT to INR 899 crore. Asset quality remained range-bound, credit cost guidance is 1.3%-1.5%, and capital augmentation is under consideration.
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Asset quality improved but saw sequential stress in tractors and LCVs due to rural cash flow issues. Credit cost is expected to decline, with stable NIMs and moderate book growth. New business initiatives and co-lending partnerships aim to support future growth.
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Q1 FY25 delivered 45% PAT growth and 23% AUM growth, though disbursements rose just 5% year-over-year due to macro disruptions. Asset quality remained stable, credit costs improved, and management targets higher growth, improved margins, and further efficiency gains for FY25.
Fiscal Year 2024
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CFO Vivek Karve is stepping down to pursue new interests, with management ensuring a smooth transition and reaffirming the company's focus on sustainable, profitable growth. The leadership emphasized transparency and stakeholder engagement throughout the process.