M&M Finance profit more than doubled, sending shares up 7.91%
Revenue growth and lower expenses lifted margins YoY, though sequential margins narrowed as costs grew faster than revenue.
Filed 24 Apr 2026, 17:06 IST · after market close · Mahindra & Mahindra Financial Services Ltd (M&MFIN)
Key takeaways
- Consolidated net profit rose +106.16% YoY as revenue grew +13.37% while expenses fell -0.72%.
- Operating margin improved 5.09 percentage points YoY but slipped 0.77 percentage points sequentially as expenses grew faster than revenue.
- The stock gained +7.91% on the first trading day, well above its 2.61% median absolute move after the past eight results.
Price around the results
Profit growth was driven by operating leverage
Consolidated net profit rose +106.16% YoY, well ahead of the +13.37% increase in revenue. Expenses declined -0.72% YoY, allowing operating profit to grow +23.14%. The tax rate was broadly unchanged, up 0.15 percentage points YoY, so the profit increase was not mainly a tax-rate benefit.
Sequential margin slipped despite steady revenue momentum
Revenue grew +1.63% sequentially, but expenses increased +3.86%, causing operating margin to narrow 0.77 percentage points. Interest expense declined -0.72% sequentially, while depreciation rose +14.47%, adding to the pressure below operating profit. Other income accounted for 2.93% of pre-tax profit, so it was not a major source of reported profit.
Margin recovered from last year but remains below the earlier peak
Operating margin improved 5.09 percentage points from Q4FY25, and the company’s 64.13% margin was 4.72 percentage points above the 59.41% median among 52 Financial Services peers that had reported the quarter. The trend shows recovery from 59.04% in Q4FY25 and 59.92% in Q2FY26, but the margin eased from 64.90% in Q3FY26. This was a sequential moderation rather than a third straight quarterly decline.
Management flagged better NIM alongside higher credit cost
The presentation said Q4 NIM expanded approximately 101 basis points YoY to 7.5%, while fee and other income rose 18 basis points to 1.5%. It also reported Q4FY26 credit cost at 1.5%, including overlays, versus 1.4% in Q4FY25, and FY26 credit cost at 1.7% versus 1.3% in FY25. Management said it launched Dhan Samvaad to target financial and digital literacy for 1 million individuals by 2030.
The market reaction was unusually positive for this stock
The shares rose +7.91% on the first trading day after the results and were up +3.79% after five sessions. That first-day move was well above the stock’s 2.61% median absolute reaction across its past eight results, when four reactions were positive and four were negative. The initial gain therefore stood out as larger than the stock’s usual post-results move.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹5,539 cr | ₹5,450 cr | +1.63% | +13.37% |
| Other income | ₹37 cr | ₹-100 cr | — | +36.17% |
| Expenses | ₹1,987 cr | ₹1,913 cr | +3.86% | -0.72% |
| Operating profit | ₹3,552 cr | ₹3,537 cr | +0.42% | +23.14% |
| Operating margin (%) | 64.13% | 64.90% | — | — |
| Interest | ₹2,220 cr | ₹2,236 cr | -0.72% | +0.10% |
| Depreciation | ₹110 cr | ₹96 cr | +14.47% | +30.27% |
| Profit before tax | ₹1,259 cr | ₹1,105 cr | +13.99% | +106.58% |
| Tax | ₹319 cr | ₹279 cr | +14.22% | +107.85% |
| Net profit | ₹940 cr | ₹826 cr | +13.91% | +106.16% |
| EPS (₹) | ₹6.75 | ₹5.93 | +13.83% | +82.43% |
Operating margin of 64.13% compares with a Financial Services sector median of 59.41% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +7.91% | +7.10% |
| Next session | +6.20% | — |
| 5 sessions | +3.79% | +3.22% |
| 15 sessions | +8.58% | — |
| 30 sessions | -5.83% | — |
Volume on the results session was 11.28× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q4 FY26 NIM expanded approximately 101 basis points year over year to 7.5%.
- Q4 fee and other income increased 18 basis points year over year to 1.5%.
New initiatives
- Mahindra Finance launched Dhan Samvaad for financial and digital literacy, targeting 1 million individuals by 2030.
- The company constructed rainwater harvesting structures and began work on a farm pond to conserve rainwater annually.
Problems & risks
- Q4 FY26 credit cost was 1.5%, including overlays, compared with 1.4% in Q4 FY25.
- FY26 credit cost was 1.7%, including overlays, compared with 1.3% in FY25.
What to watch
- Whether operating margin holds above 64.13% after the sequential decline of 0.77 percentage points.
- Whether Q4FY26 credit cost of 1.5% moves back toward the Q4FY25 level of 1.4%.
- Whether NIM remains near the 7.5% reported for Q4FY26 after the approximately 101-basis-point YoY expansion.