M&MFINNSEQ4 FY26April 24, 2026

Mahindra & Mahindra Financial Services Limited

10,254words
105turns
12analyst exchanges
1executives
Management on call
Abhijit Tibrewal
Motilal Oswal
Key numbers — 40 extracted
8.2%
front, if you look at we have set some records, our GS2 and GS3 numbers are at an all-time low at 8.2%. So a very strong delivery. The franchise has delivered on margin and asset quality. And I would
19%
e 4. So on profitability for the full year, these are messages for full year FY26, you see PAT up 19% and for Q4 PAT up 55%. I will talk about overlays in the next slide. The second key message is,
55%
ty for the full year, these are messages for full year FY26, you see PAT up 19% and for Q4 PAT up 55%. I will talk about overlays in the next slide. The second key message is, we've been speaking f
100%
we are making AI investments. But our entire lending stack, which is the wheels business has got 100% live. Third update on the asset quality. GS3 at 3.4% big reduction from last quarter and same t
3.4%
stack, which is the wheels business has got 100% live. Third update on the asset quality. GS3 at 3.4% big reduction from last quarter and same time last year and GS2+GS3 at an 8-year low. And finally
INR 217 crore
s that if things go south. So the management overlay that we have created in Q4 in rupee value is INR 217 crores. Besides this management overlay, as any lending company would be also prudent is creating a ver
2.4%
I'll go back to Page Number 5, which is the highlights on profitability. So Q4 RoA very strong at 2.4%, full year RoA at 2% this is compared to 1.9% last year. Our Q4 PAT grew 55%, without the overlay
2%
mber 5, which is the highlights on profitability. So Q4 RoA very strong at 2.4%, full year RoA at 2% this is compared to 1.9% last year. Our Q4 PAT grew 55%, without the overlay this would have be
1.9%
ghlights on profitability. So Q4 RoA very strong at 2.4%, full year RoA at 2% this is compared to 1.9% last year. Our Q4 PAT grew 55%, without the overlay this would have been at 84%. And full-year PA
84%
is compared to 1.9% last year. Our Q4 PAT grew 55%, without the overlay this would have been at 84%. And full-year PAT growth at 19%, without overlay this would have been at 30%. NIM expansion, aga
30%
ould have been at 84%. And full-year PAT growth at 19%, without overlay this would have been at 30%. NIM expansion, again very strong. As you would know, when we looked at the levers for ROA expans
101 bps
doing a commendable job in terms of cost of funds, which has given us an overall NIM expansion of 101 bps YoY and for the full year 60 bps increase in NIM. Moving to Page Number 6. We've talked about our
Guidance — 20 items
Raul Rebello
opening
“When I reflect on the entire FY26, on an overall basis, we have done very well in terms of a significant improvement in margins.”
Raul Rebello
opening
“So on profitability for the full year, these are messages for full year FY26, you see PAT up 19% and for Q4 PAT up 55%.”
Raul Rebello
opening
“So these are our priorities going into FY27 also that we will continue to defend and grow our wheels leadership.”
Raul Rebello
qa
“So we do see this segment as and I'm not giving Q1 commentary of full year of next year.”
Raul Rebello
qa
“And finally, on the diversification, our SME and mortgage business are also chugging along pretty well, and that gives us an ability to overall aim for mid-teen growth as we go forward.”
Raul Rebello
qa
“But for any lender with our size and scale, aiming for less than teen growth won't be prudent, I think, or won't be competitive.”
Renish
qa
“So when we look at the full year FY26 business spend in SME remain flat at 2% or growing at 2% YoY.”
Renish
qa
“Even when most of the time in FY26, the underlying price was strong.”
Renish
qa
“And internally, what's the outlook, you know, you may have in terms of growth in FY27 in SME?”
Raul Rebello
qa
“We do plan to continue to grow in the 30% - 40% kind of range, but the denominator being very low.”
Risks & concerns — 15 flagged
And on the risk front, if you look at we have set some records, our GS2 and GS3 numbers are at an all-time low at 8.2%.
— Raul Rebello
It's not about us seeing any visible stress, this is more about being prudent.
— Raul Rebello
It has been very well thought through, through different customer segments, risk profiles, etc.
— Raul Rebello
We know that growth at the cost of risk and cost of margins is not something that we do.
— Raul Rebello
We do know where the strains are, we do know where the stress points are.
— Raul Rebello
We have swapped out some segments which are extremely volatile.
— Raul Rebello
So if you look at the quarter 4 of FY26, the interest rates were already elevated in Jan, Feb and March because of the March being March, the year-end pressure on the liquidity as well as cash outflows, along with the gulf prices, I think March rates were much more elevated.
— Pradeep Agrawal
So it's very difficult to predict the overall change, what kind of incremental CoF and all because compared to March, April is much, you can say, lower.
— Pradeep Agrawal
You mentioned like maybe this is against some portfolio, which maybe it might, if there is a slowdown or something, we might see a risk to that portfolio.
— Kunal Shah
And we know we have a tractor portfolio, which can get -- can see some temporary or some kind of a stress.
— Raul Rebello
And maybe we had quite a volatile coverage all through.
— Kunal Shah
So a lot of volatility out there in terms of the coverage, but now maybe should we see this remaining in this zone or could there be a further risk?
— Kunal Shah
So it gives us the ability when and if there is no stress on this specific of these two incidents to kind of revisit the release of it.
— Raul Rebello
And if so, what would be the single largest lever for that, given that the top line, which is the NIM is a market determined factor in terms of competitiveness and challenges and you yourself are saying beyond 7% going to be slight very difficult?
— Mayur Parkeria
The rural cash flows can be at risk, collection efficiencies at risk.
— Mayur Parkeria
Q&A — 12 exchanges
Q
Hi sir thanks for the opportunity. Sir, my first question is on the AUM growth side, right? So now I'm assuming we are largely done with the process restructuring and also might have built AI capabilities. So when do you see growth accelerating from current level of 12%?
Raul Rebello
Yes. Thanks, Renish. So see, when we look at the vectors for growth here, where we are, as you know, very dominant on is the tractor business, and we have demonstrated that last year. We see that momentum continuing into this year. Of course, since the denominator is quite high, we may not see the same YoY growth of what we demonstrated last year because the base is higher. Other segments is the used vehicle business, which in this environment is also something that we're over-indexing on. As you know, some of the OEMs have called out with the constraints, maybe the inventories are also reduci
Q
Yeah. Hi, team congratulations on the quarter. So my first question is on CVs. When do we start seeing growth in the CV business step back – step back up. I understand you've been recalibrating for the last few quarters. When do we see that get over and growth pick back up there?
Raul Rebello
Yes, Piran, if you have anything, I'll address all your questions at once. Second is on margins. Now margins, again, surprised positively. I think last quarter, when we hit the 7.5% number, you mentioned that there were one-offs and we should take the 9-month number of 7.1% as a more steady-state number. Do you still hold that belief or do we -- should we now think of 7.5% as a steady-state margin number? That’s it. Yes. Thanks, Piran. Let me go in reverse order. I'll talk about the margin question first. See, for the full year, we are still at 7.1%, right? And as I commented, what we see as l
Q
Yes, a lot of questions there, Shubhranshu, good to connect, first and foremost. Let me just make sure that whatever I disclose here, I will always have to be consistent with what we put out in the public domain. So I may not be able to give you the granularity that you asked for, but since we put up the PPC number and I don't think we have put that out earlier, let me tell you why we think it's a good time for now servicing PPC. As you know, we have been on this path of diversification for a while now and you can't talk about PPC if you are a single trick pony and just do the vehicle business
Raul Rebello
You've jumped one fiscal. Okay, you're talking about not '27. You're looking at '28? Shubhranshu Mishra: Or maybe you can just talk about '27, if that's okay? Okay. Thank you because we don't give 1 year guidance. I was hoping to give you. So credit cost, we have always said that our business model should factor or stomach 1.3 to 1.7. We are confident to stay within that. There are clouds above us and part of the reason why we create some of those buffers are to make sure that we operate within the business model operates within those boundaries. What was the second question other than credit
Q
So firstly, again, on this entire overlay provisioning, so again what quantum of book we would have created this? You mentioned like maybe this is against some portfolio, which maybe it might, if there is a slowdown or something, we might see a risk to that portfolio. And given that it's again created in GS3, so if you can quantify that proportion of pool against which 217 is created?
Raul Rebello
Yes. So Kunal, this provision, I'll invite Pradeep here to kind of give more color on the mechanics of the provision creation. So Kunal, what we have done is that we have basis the current geopolitical situation, we have taken certain macroeconomic variables, which can have an probable impact on the portfolio. And this is that probable impact, we have quantified what could be the gross slippages in my portfolio and after calculating that probable gross slippages, we have kind of worked out this overlay number. So Kunal just to add to that. Sorry, this is not any specific or segment specific. I
Q
Yes. Hi, Raul. Good evening and thanks for taking my question. Just one question on the fee part. So fee to assets of 1.4, now you've got a lot of things that you planned for fees and increasing that. Where do you see that settling ideally, if not a year down the line, maybe 2 years or 3 years, but what do you think is a level you would want to achieve?
Raul Rebello
See, I think in the medium term, this 1.4 to 1.5 is itself a reasonable number. We have covered good ground. What are the levers to further take this up? We have reconstituted our distribution channel, our branch. We have 1,400 branches, which were earlier mostly fulfilment centers. They have been re-orchestrated to become very active acquisition centers and cross-sell centers. So the larger, if you see what goes into that fee is basically investment income, you have dividend that comes in from the MIBL subsidiary and you have insurance income. All of this will keep growing, but as they grow,
Q
Good evening, gentlemen and thank you for taking my question. My first question is a slightly very broad-level question. And just two background liner before I go to the question. This is coming from a very longish perspective of our, at the parent level also, we had aspirations of 18% ROE and we have met that. And the group has gone through significant transformations in terms of efficiency and growth. From that perspective, that's the background I'm just putting. And even our own company has undergone changes with respect to across management, across financials and operating. There is a lot
Raul Rebello
Thanks, Mayur, for a longish, but important question. I'd invite you to just look at Page number 32 in your panel. It's a reflection of , while we are clearly not in any ways, happy to be delivering a 12.5% ROE. But if you look at where we are coming from, it's from 10% to 12.4% to 12.5%. And, of course, the rights issue would have maybe muted that a bit. I would just remind you that while the group chases an 18% ROE, we did say our first stop would be to get to 15. And if you look at the trend that I request you to look at in Page 32, we have been trending in that direction. Clearly, we are n
Q
Hi thank you for the opportunity. So my one question is going to be on the AI implementation that you spoke about. Good to hear that it's become more AI/ML in the back operations team and the collections team. Is there any pilot or any other program on the AI front being done for any other department? Also, if you can help us understand if there will be investments, OPEX investments made towards those in the coming years?
Raul Rebello
If you just look at Page Number 6 where I've tried to detail out where we are looking at AI adding to dollar value for our franchise, clearly, the low-hanging fruit was deploying it in collections and in our AI/ML models for underwriting. We are seeing good fruits of those investments right now in terms of early bucket efficiency. I have detailed 25% improvement as well as release of costs in our calls in our call centre because a lot of our calls, pre-due calls, early bucket calls are happening through 8 multilingual BOTs giving us a steep reduction in the otherwise cost that we had in collec
Q
Hi thanks for the opportunity I just have one question. So as per your FY '25 Annual Report, you waived fee income from life insurance sales of about INR 150 crores out of the total fee income of INR 510 crores. What is that like-to-like figure for this year, FY '26? So what is the fee income from life insurance sales this year, which was INR 150 crores last year?
Raul Rebello
I don't think we have disclosed specifically because our fee income is a combination of three to four elements. There is insurance across motor insurance, life insurance, health insurance. In that fee income, we have investment income, we have dividend income. I'm not sure whether. So, in FY '25 Annual Report that number is disclosed that income from commission services on life insurance is about INR 150 crores. I just wanted a like-for-like figure for this year. Yes, fair to say if most of our fee income has doubled, this possibly would have doubled also. Okay. So about INR 300 crores? Yes. I
Q
Thank you for the opportunity, sir, I just had one quick question. Is there any particular geography that you are seeing is behaving differently, say, in April or March?
Raul Rebello
So, what we usually see for a business like ours is any state or geography which gets into elections has temporary disruptions, which is not an outlier. This has been the template that any kind of lender would see, especially if you're lending to not the primmest of prime customers, there are temporary disruptions. So fair to say with the Tamil Nadu and West Bengal and Assam, we did see that and we do categorize that as temporary disruptions and not structural shifts in collection efficiency. Having said that, the West East crisis has created a little bit of remittance problem in some states.
Q
Yeah hi, thank you sir for giving me the opportunity. Now coming back to growth again, like we have and we mentioned in our parent’s investor deck released in November '25 parent aspirations as well that growth is expected at 18% to 20% in medium term. So, are we towards that trajectory? I know you have mentioned that this year, we will it would be a function of risk as well. But are we on that trajectory? Or how do you see that growth in the medium term?
Raul Rebello
Yes. No, thank you, and the reference was important just to get every piece of understanding right. We said growth in the decade at 18% to 20%, that means from '21 to '31 we were citing that period, which means for the next 5 years, we are baked in a 16% to 18% growth. Do we hold to that 16% to 18% growth CAGR for the next 4 to 5 years? Yes. What are the levers to get to that growth? The wheels business will grow at close to market trends. The bigger growth will come in from 2 - 3 categories which are more relatively new. So, we don't look at 20-30% growth there. We look at 30% to 40% growth t
Q
Yes sir, thank you taking my question. I apologize, I joined slightly late. So just on this management overlay so your Q4 collection efficiency is quite strong at around 98%. Yet you've taken this additional management overlay this quarter. So, any specific localized stress that you, that sort of prompted you to take this management overlay, especially when collections are doing well? That's the question I have.
Raul Rebello
Yes. Vinod, I think you missed our opening commentary. The management overlay has nothing to do with what happened in FY '26. We just spelled out and for your benefit, I'll repeat it. The management overlay is more keeping in mind the current headwinds, which you are very aware of, which is the West Asia Crisis, some of the monsoon related guidance’s given by the two meteorological departments. Our April collection numbers also are pretty much in the clip that we want it to be. This is more prudence-based overlay created, more from an overall FY27 headwinds that we see right now. If those head
Q
Thank you, nothing much to add in closing comments. I'll just repeat what I said at the start. It's good to close the year on a positive note. Q4 was extremely, I would say, robust in terms of serious profitability uptick, which we have seen through margin accretion and through very strong credit cost and asset quality progress. I also want to call out a very hearty climb back to some of the growth which we didn't see in the first half of the year. We were able to use the tailwinds of growth, especially in the wheels business and overall has ended in FY '26 in reflection, which has been which
Management
Speaking time
Raul Rebello
41
Moderator
14
Renish
8
Pradeep Agrawal
6
Abhishek M
6
Raghav
6
Piran Engineer
5
Kunal Shah
5
Mayur Parkeria
4
Shreya Shivani
3
Opening remarks
Abhijit Tibrewal
Yes, Thank you, Rutuja. Good evening, everyone. I am Abhijit Tibrewal from Motilal Oswal. And it is our pleasure to welcome you all to this earnings call. Thank you very much for joining us for the Mahindra Finance call to discuss the company's Q4 FY26 performance and business update. To discuss the company's earnings, I am pleased to welcome Mr. Raul Rebello, Managing Director and CEO; Mr. Pradeep Agrawal, Chief Financial Officer; and Mr. Sandeep Mandrekar, Chief Business Officer - Wheels. On behalf of Motilal Oswal, we thank the senior management and the Investor Relations team of Mahindra Finance for giving us this opportunity to host you today. I'll now invite Mr. Rebello for his opening remarks, post which we will open the floor for a Q&A. With that, over to you, sir.
Raul Rebello
Hi, good evening. Thank you, Abhijit and the Motilal Oswal team. And again welcome everyone and thank you for joining this call. As usual, I would request you to keep the deck handy which we have circulated some time back on the exchanges. I will refer to the page numbers as I walk you through the commentary. So first and foremost, on behalf of all of us the Mahindra Finance team, we are very encouraged with our Q4 results, we think we ended the year on a very strong note. When I reflect on the entire FY26, on an overall basis, we have done very well in terms of a significant improvement in margins. And on the risk front, if you look at we have set some records, our GS2 and GS3 numbers are at an all-time low at 8.2%. So a very strong delivery. The franchise has delivered on margin and asset quality. And I would also underscore that growth has been quite reasonable. We did see the first half of the year being quite moderate and momentum started kicking in from Q3. And even in Q4, we con
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