Mahindra & Mahindra Financial Services (Mahindra Finance) reported a 55% year-on-year growth in its net profit, reaching 882 crore rupees for the quarter from July to September of fiscal year 27 (Q2FY27).
During this quarter, total income increased by 15% year-over-year to 5,175 crore rupees, and the volume of loans disbursed grew by 22% to 16,499 crore rupees. Meanwhile, the Net Interest Margin (NIM) remained unchanged at 7% in Q2FY27 compared to the same quarter last year.
Assets under management (AUM) increased by 15% year-over-year, reaching 1.46 trillion rupees. The cost of credit losses decreased to 1.6% of average assets in Q2FY27, compared to 2.2% a year earlier.
The asset quality of this Non-Banking Financial Company (NBFC) improved during the reporting period. The proportion of Stage 3 assets decreased from 3.9% to 3.4%, and the proportion of Stage 2 assets fell from 5.8% to 4.7%. Collection efficiency improved to 97% from 96% in Q2FY26.
The company's capital adequacy ratio stood at 18%, with Tier-I capital reaching 16.2%. Diversification beyond vehicle financing continued to gain momentum: the volume of loans disbursed in non-transport segments grew by 52% year-on-year. These areas include MSME lending, personal loans, and other segments, including Mahindra Rural Housing Finance (MRHFL).
Rahul Rebelo, Managing Director and CEO of Mahindra Finance, noted that the second-quarter results provide confidence that the ongoing changes are leading to stronger and more stable business performance. He added that the company is encouraged by the growth rate driven by a 22% increase in disbursements, credit cost control at 1.6%, and 55% profit growth, and maintains focus on disciplined execution of plans until fiscal year 31.