Mahindra Finance Q2 profit rises 55% to Rs 882 crore

Mahindra & Mahindra Financial Services reported a 55% year-on-year increase in standalone net profit to Rs 882 crore for the quarter ended September 30, 2026, as lending volumes expanded and credit costs declined. Profit in the corresponding quarter a year earlier was Rs 569 crore, according to Economic Times Markets.

Consolidated net profit increased 61% to Rs 911 crore, while consolidated total assets expanded 21% to Rs 1.80 lakh crore. These figures are distinct from the lender’s standalone earnings and business assets under management.

Lower provisions support earnings

Revenue from operations increased 15% to Rs 5,164 crore. Net interest income rose 17% to Rs 2,822 crore, and pre-provisioning operating profit grew 20% to Rs 1,791 crore.

Provisions and write-offs fell 16%, from Rs 751 crore to Rs 630 crore. Credit cost declined to 1.6% of average total assets, against 2.2% a year earlier, even as net interest margin held steady at 7%.

Lending expands beyond vehicles

Quarterly disbursements rose 22% to Rs 16,499 crore, while business assets under management increased 15% year on year to Rs 1.47 lakh crore. Non-vehicle disbursements, including SME loans, personal loans and housing finance, grew 52%.

Managing director and chief executive Raul Rebello told an analyst call that gold loans, SME lending and mortgages helped drive disbursement growth. He said diversification beyond passenger and commercial vehicle financing had taken non-vehicle business to 20% of consolidated lending AUM; vehicle lending accounted for the remaining 80%.

Passenger vehicle disbursements increased 28% to Rs 6,826 crore, and pre-owned vehicle financing rose 15% to Rs 2,834 crore. Commercial vehicle and construction equipment disbursements grew 16% to Rs 2,657 crore, while tractor financing increased 13% to Rs 1,979 crore.

Asset quality improves; liquidity buffer tops Rs 16,150 crore

Gross Stage 3 assets declined to 3.4% from 3.9% a year earlier, while Stage 2 assets fell to 4.7% from 5.8%. Collection efficiency improved to 97% from 96%. Provision coverage for Stage 3 assets stood at 56.6%.

At the end of September, the capital adequacy ratio was 18%, including Tier-I capital of 16.2%. The liquidity buffer exceeded Rs 16,150 crore. Rebello described the buffer as a record high and indicated that the company might not increase it further, even if it did not draw on it.

The lender is targeting a return on assets of 2.2%–2.5% by FY31. Its return on assets for the September quarter was 2.2%; the longer-term range remains a management target, rather than an achieved future outcome.