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Informist, Monday, October 19, 2026

 

By Diksha Tripathy

 

MUMBAI – Mahindra & Mahindra Financial Services Ltd. is expected to report a robust rise in net profit for the September quarter as growth in its business assets and strong retail disbursements support earnings, according to brokerage estimates. However, higher borrowing costs and a likely moderation in lending spreads may weigh on its sequential performance.

 

The non-banking financial company is expected to report a net profit of INR 8.75 billion for the September quarter, up nearly 54% on year but down nearly 3% on quarter, according to the average of estimates from 13 brokerages. The highest estimate for net profit is INR 10.87 billion from Antique Stock Broking Ltd. while the lowest is INR 7.73 billion from Nomura Financial Advisory and Securities (India) Pvt. Ltd. The company had reported a net profit of INR 8.99 billion for the June quarter.

 

The company's net interest income is also expected to register healthy growth on an annual basis. It is seen rising over 20% on year and around 5% on quarter to INR 25.40 billion, according to the average of estimates. The highest estimate for net interest income is INR 28.26 billion from Antique Stock Broking while the lowest is INR 24.01 billion from Kotak Securities Ltd.

 

The company's business update showed disbursements rising 22% on year to INR 164.90 billion in the September quarter while business assets grew 15% to INR 1.46 trillion as of Sept. 30. Disbursements for the first half of the financial year 2026-27 (Apr-Mar) rose 22% on year to INR 320.50 billion. Collection efficiency improved to 97% in the quarter, from 96% a year ago.

 

M&M Financial Services is scheduled to release its earnings for the September quarter Wednesday. Brokerages expect its margins to come under pressure as borrowing costs rise and lending yields moderate. Emkay Global Financial Services Ltd. and Motilal Oswal Financial Services Ltd. expect M&M Financial's net interest margin to decline to around 6.8% from 7.11% in the June quarter. Kotak Securities expects the spreads to moderate by 20 basis points sequentially to 6.2%. Nomura expects a sequential decline of 18 bps in the net interest margin. 

 

Asset-quality indicators in the company's business update were broadly stable or had improved. The gross stage 3 asset ratio was around 3.35-3.45% at the end of September, compared with 3.45% in the previous quarter and 3.94% a year ago. The gross stage 2 asset ratio was 4.70-4.80%, down from 4.90% in the June quarter and 5.80% a year ago. Some brokerages expect credit costs to rise modestly to around 1.8% in the quarter, from 1.7% in the previous two quarters, while others point to credit costs normalising.

 

The outlook for the coming quarters will also depend on rural demand and the performance of the company's non-vehicle businesses. IDBI Capital Market Services Ltd. expects growth to be led by small and medium enterprises, mortgages, and personal loans, while some brokerages have flagged tractor and rural collections after a weaker monsoon as key factors to monitor. Higher bond yields could put further pressure on funding costs, although JM Financial Institutional Securities Pvt. Ltd. expects much of that impact to flow through into FY28.

 

Monday, shares of M&M Financial ended at INR 304.90 apiece on the National Stock Exchange, down over 2% from Friday. The stock has fallen nearly 13% since the company announced its June quarter earnings on Jul. 21. Of the 18 brokerage reports on the company available with Informist, 16 have a "buy" or equivalent recommendation on the stock with an average price target of INR 407 per share. This is over 33% higher than the current market price. The remaining two brokerages have a "hold" recommendation on the stock at INR 393 per share.

 

Following are the Jul-Sept earnings estimates for M&M Financial Services from 13 brokerages in descending order of the net profit estimate, in INR billion:

 

Brokerage	NII	Net Profit
Antique Stock Broking Ltd.	28.26	10.87
IDBI Capital Market Services Ltd.	24.66	9.72
Nuvama Wealth Management Ltd.	25.03	9.16
Emkay Global Financial Services Ltd.	24.11	9.01
Prabhudas Lilladher Pvt. Ltd.	24.07	8.86
360 ONE Capital Market Pvt. Ltd.	28.00	8.77
Nirmal Bang Equities Pvt. Ltd.	24.15	8.55
Kotak Securities Ltd.	24.01	8.30
JM Financial Institutional Securities Pvt. Ltd.	27.99	8.26
YES Securities (India) Ltd.	27.48	8.25
Motilal Oswal Financial Services Ltd.	24.01	8.23
Mirae Asset Sharekhan Ltd.	24.05	8.05
Nomura Financial Advisory and Securities (India) Pvt. Ltd.	24.34	7.73
Average	25.40	8.75

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Rajeev Pai

 

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