Mahindra & Mahindra Financial Services Limited Earnings Summary — Q3 FY2026
Mahindra Finance Reports Q3 FY2026 Results with Improved Capital Adequacy and Sequential Profit Growth
Quarterly Business Intelligence
AI Quarterly Scorecard™
Computed deterministically from the last 10 reported quarters.
Quarterly Business Momentum
- Revenue has increased for 10 consecutive quarters.
- Revenue of ₹5,718 Cr is 14.6% higher year-on-year.
- Revenue has compounded at 13.7% annualised over the last 10 quarters.
- Revenue is at its highest level in 10 quarters.
- Net profit of ₹926 Cr is 75.4% above the same quarter last year.
- Profit growth is outpacing revenue growth, pointing to positive operating leverage.
- Net profit has compounded at 15.4% annualised across the period.
- Operating margin stands at 64.4% in Q1 FY2027.
- Operating margin expanded by 379 bps year-on-year.
- Over the last two years operating margin has expanded by 328 bps.
- PBT margin is 21.7%.
- Expense growth of 3.5% remained below revenue growth of 14.6%.
- Operating profit of ₹3,684 Cr is 21.7% higher year-on-year.
- Operating leverage continues to improve.
- 6 of the last 6 measured quarters delivered year-on-year revenue growth.
- Overall quarterly business momentum scores 80/100 (Strong) on the latest 10 quarters.
- Business momentum remains positive heading into the next quarter.
Quarterly Financials
Last 10 Reported Quarters • All figures in ₹ Crore • Margins in %
| Metric | Trend | Latest Q1 FY2027 | Q4 FY2026 | Q3 FY2026 | Q2 FY2026 | Q1 FY2026 | Q4 FY2025 | Q3 FY2025 | Q2 FY2025 | Q1 FY2025 | Q4 FY2024 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | Improving | 5,718 | 5,539 | 5,450 | 5,026 | 4,991 | 4,886 | 4,797 | 4,465 | 4,316 | 4,280 |
| Expenses | Improving | 2,034 | 1,987 | 1,913 | 2,015 | 1,964 | 2,001 | 1,325 | 1,830 | 1,676 | 1,520 |
| Operating Profit | Improving | 3,684 | 3,552 | 3,537 | 3,012 | 3,026 | 2,885 | 3,472 | 2,636 | 2,639 | 2,761 |
| Operating Margin | Stable | 64.4% | 64.1% | 64.9% | 59.9% | 60.6% | 59.0% | 72.4% | 59.0% | 61.1% | 64.5% |
| Other Income | Volatile | 29 | 37 | -100 | 39 | 43 | 27 | 19 | 28 | 58 | 68 |
| Interest | Stable | 2,372 | 2,220 | 2,236 | 2,198 | 2,280 | 2,218 | 2,175 | 2,062 | 1,960 | 1,861 |
| Depreciation | Improving | 99 | 110 | 96 | 94 | 86 | 85 | 82 | 79 | 76 | 72 |
| Profit Before Tax | Volatile | 1,242 | 1,259 | 1,105 | 759 | 704 | 609 | 1,233 | 523 | 661 | 896 |
| Tax | Volatile | 315 | 319 | 279 | 193 | 175 | 153 | 315 | 133 | 164 | 225 |
| Net Profit | Volatile | 926 | 938 | 824 | 564 | 528 | 457 | 918 | 389 | 498 | 670 |
| Net Margin | Volatile | 16.2% | 16.9% | 15.1% | 11.2% | 10.6% | 9.4% | 19.1% | 8.7% | 11.5% | 15.7% |
Key Takeaways
- Mahindra Finance reported a consolidated net profit of ₹826.60 crore for Q3 FY2026, showing a strong sequential recovery of 24.1% despite a year-on-year decline.
- The company recognized a one-time exceptional charge of ₹132.95 crore (consolidated) related to the implementation of new Labour Codes for Gratuity and Leave Encashment.
- Capital Adequacy Ratio improved significantly to 19.82% compared to 17.81% in the same quarter last year, bolstered by a Rights Issue completed in June 2025.
- Asset quality showed subtle improvement with Gross Stage-3 Assets decreasing to 3.80% from 3.94% in the previous quarter.
- Operating revenue continued robust growth, reaching ₹6,449.84 crore, driven primarily by strong interest income of ₹4,709.81 crore from the loan portfolio.
- The company completed a comprehensive annual refresh of its Expected Credit Loss (ECL) model, incorporating latest multi-factor macro-economic estimates.
- Net Worth increased to ₹23,828.34 crore as of December 31, 2025, providing a significant cushion for further balance sheet expansion.
Management Guidance
Management is focused on digital transformation and premiumization to improve asset quality. The strategy remains anchored in leveraging the Mahindra Group ecosystem for rural lending while maintaining a robust AAA-rated balance sheet despite cyclical rural economic sensitivities.
Sentiment Shift
Improving
A sequential rebound in profitability and bettering asset quality (Gross Stage-3) offset the impact of the one-time labor code exceptional item and YoY profit compression.
Outlook
The outlook remains positive for rural credit demand supported by the Mahindra ecosystem, although margins remain sensitive to the interest rate environment and rural cash flows. The improved capital adequacy (19.8% CAR) provides headroom for growth in the coming fiscal year.
From the Annual Report (Key Quotes)
“The Company has undertaken comprehensive review of its Expected Credit Loss (ECL) model... to calibrate methodology for computation of Probability of Default (PD) and Loss Given Default (LGD).”
“In accordance with the new Labour Codes, the Company has currently estimated the incremental impact of Gratuity and Leave Encashment to be ₹117.33 crore (Standalone).”
“The Company holds provision towards expected credit loss as at December 31, 2025 aggregating to ₹3,876.46 crore, including management overlays of ₹635.00 crore.”
Official Quarterly Documents
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This summary is AI-generated from Mahindra & Mahindra Financial Services Limited's latest quarterly filing and earnings call. For informational purposes only — not investment advice.
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