India · Delayed Price · Currency is INR Mahindra & Mahindra Financial Services Earnings Call Transcripts
Fiscal Year 2026
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Q4 and FY 2026 closed with strong profit growth, margin expansion, and record-low asset quality ratios. Digital and AI initiatives drove efficiency, while prudent overlays and capital actions position the company for 16%-18% medium-term growth.
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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 strong sequential disbursement growth, stable margins, and a one-time provision relief, resulting in robust profitability. Asset quality remained range-bound, with credit costs and NIMs expected to stay within guided ranges. Strategic focus remains on diversification and digital transformation.
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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 year-over-year, driven by strong AUM and income growth, though disbursement growth was moderate due to macro disruptions. Asset quality and capital adequacy remain robust, with management targeting improved margins and lower credit costs 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.