Mahindra & Mahindra Financial Services Limited — Investor Meet, 28-04-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Mahindra & Mahindra Financial Services reported a revenue of ₹119,673 Cr for the fiscal year, marking a 17% growth in the book compared to the previous year. While the profit after tax (PAT) saw a 9% decline for Q4, it recorded an impressive 33% increase for the full year. The company's net interest margins (NIMs) compressed to 6.5%, affected by higher funding costs and a slight decrease in yields. Asset quality remained stable, with gross stage 3 (GS3) at 3.7% and gross stage 2 plus GS3 below 10% at 9.1%. End losses also decreased sequentially from ₹2,513 Cr in FY22 to ₹1,559 Cr in FY25.

**Future Outlook and Growth Drivers:** Management is focusing on sustaining growth in the tractor segment and increasing fee-based income, especially through their corporate agency license, which is expected to enhance revenue streams. The SME business, which yielded a notable 48% growth in disbursements, will remain a key focus area. Digital initiatives under Project Udaan are producing early benefits and enhancing efficiency, including higher noncash collections.

**Order Book and Operational Updates:** The company is strategically positioned to tap into opportunities in the tractor segment, with growth momentum anticipated from partnerships with OEMs for the EV segment as well.

**Analyst Q&A Insights:**

- **Revenue and Profitability:** Analysts expressed concerns regarding disbursement forecasts due to risk calibrations in certain segments. Management responded that they aim for mid-to-high-teen growth rates in the medium term while cautiously optimistic for FY26.

- **Market Position and Competitive Landscape:** Competition in the wheels segment remains intense, prompting a balance between growth and maintaining NIMs.

- **Operational Challenges or Risks:** Management acknowledged higher slippages and emphasized ongoing collection efforts to mitigate risks.

- **Capex and Capital Allocation:** Analysts queried capital expenses and operational costs amidst diversification initiatives. Management plans to maintain a stable cost-to-income ratio while selectively investing in new verticals.

- **Strategic Priorities and Long-Term Vision:** Sustainability and digitization in their operation will be crucial as they expand their non-wheels business.

**Market or Regulatory Updates:** Regulatory changes impacting financing and lending practices were briefly acknowledged as potential influences on strategy.

**Strategic Focus Areas:** A renewed focus on tractors and SME will drive the growth strategy, with margin enhancement from cost-of-fund management.

**Investor Insight:** The financial health and strategic direction suggest a cautiously optimistic outlook, supporting a hold position in the near to medium term. However, ongoing operational efficiencies and asset quality stabilization are crucial for long-term confidence.