Mahindra & Mahindra Financial Services (M&MFIN) Q4 24/25 earnings summary

Executive summary

• Achieved 3% YoY disbursement growth to Rs 57,900 crore and 17% YoY AUM growth to Rs 1,19,673 crore for FY25, with PAT rising 33% YoY to Rs 2,345 crore and Q4 PAT at Rs 563 crore, down 9% YoY.

• Asset quality remained stable with Gross Stage 3 at 3.7% and credit cost at 1.3% for FY25, while end losses declined to Rs 1,559 crore.

• NIM compressed to 6.5% for FY25, attributed to higher funding costs and marginal yield reduction; cost-to-income ratio improved to 35.8%.

• SME loan disbursals surged 48% YoY, and digital transformation initiatives improved non-cash collections from 69% to 77% with flat headcount.

• Board approved audited results, recommended a Rs. 6.50 per share (325%) dividend, and increased borrowing limits to Rs. 1,50,000 crore.

Financial highlights

• Total income grew 19% YoY to Rs 16,075 crore for FY25; standalone net profit after tax was Rs. 2,345.04 crore, and consolidated net profit after tax was Rs. 2,260.87 crore.

• Pre-provisioning operating profit increased 14% YoY to Rs 4,765 crore.

• Credit cost declined to 1.3% for FY25 from 1.7% in FY24; end losses reduced to Rs 1,559 crore.

• Capital adequacy at 18.3% with Tier I at 15.2%; standalone debt-equity ratio at 5.70.

• RONW improved to 12.4% and ROA to 1.9% for FY25.

Outlook and guidance

• No specific FY26 guidance, but medium-term growth targeted at mid to high teens, with non-wheels business expected to reach 25% of AUM in 3–5 years.

• Margins expected to improve as cost of funds benefit from recent rate cuts flows through and as higher-yielding segments like tractors and used vehicles are prioritized.

• Credit cost guidance set at 1.3%–1.7% for the medium to long term, reflecting cyclical business realities.

• OPEX expected to remain within 2.5%–2.7% despite diversification and investments in new businesses.

• Board recommended a dividend of Rs. 6.50 per share for FY2025, subject to shareholder approval at the AGM.