Mahindra & Mahindra Financial Services has announced its Q3FY26 business update, reporting steady operational performance with disbursements reaching ₹17,600 crore, marking a 7% year-on-year increase. The NBFC's latest disclosure demonstrates consistent growth momentum while maintaining strong asset quality metrics, with notable improvements in early delinquencies signaling rural market recovery.

Strong Disbursement and Asset Growth Performance

The company's Q3FY26 performance reflects robust business expansion across key operational metrics, with significant growth in both disbursements and overall business assets.

The disbursement figures exclude finance lease transactions, providing clarity on the company's core lending operations. Nine-month disbursements reached ₹43,900 crore, up 4% year-on-year, indicating sustained business momentum throughout the fiscal year.

Asset Quality Shows Improvement with Stable NPAs

The company maintained stable asset quality metrics with Stage-3 gross NPAs remaining in the 3.9% to 4.0% range, while early delinquencies showed significant improvement, reflecting rural market recovery trends.

Stage-3 assets remained stable in the 3.9% to 4.0% range as of December 31, 2025. Early delinquencies showed notable improvement, with Stage-2 assets declining to 5.4%-5.5% from 5.8% in the September quarter and significantly better than 6.3% recorded a year earlier, indicating strengthening rural recovery.

Collection Efficiency and Liquidity Position

The company maintained its collection efficiency at 95% for Q3FY26, unchanged from the year-ago period, demonstrating effective recovery mechanisms and stable customer payment behavior. Mahindra & Mahindra Financial Services maintains a comfortable liquidity position with a buffer exceeding ₹8,850 crore as of December 31, 2025.

This substantial liquidity provides adequate resources to support business operations and growth initiatives while managing potential market uncertainties.

Market Performance and Outlook

Shares of the NBFC ended 0.61% lower at ₹401.70 ahead of the business update announcement. The company will release detailed financial results for the December quarter at a later date. The Q3FY26 metrics indicate the company's ability to maintain operational stability while achieving steady growth, with improving asset quality metrics reflecting a balanced approach to business expansion and effective risk management in the recovering rural market environment.

M&M Financial Services has received an upgraded Environmental, Social and Governance (ESG) rating, with its score improving to 79.6 from the previous rating of 76.2. The enhanced rating was assigned by SES ESG Research Private Limited, a SEBI registered Category II ESG rating provider.

ESG Rating Enhancement Details

The company informed stock exchanges about the rating upgrade through a regulatory filing on January 3rd, 2026. The ESG assessment was conducted independently by SES ESG Research Private Limited without any engagement from the company.

Regulatory Compliance and Disclosure

The disclosure was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The filing referenced Part A, Para A (3) of Schedule III and SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

Key aspects of the rating process include:

• Independent assessment by SEBI registered ESG rating provider
• Based on publicly available company data for FY 2024-25
• No direct engagement between the company and rating agency
• Compliance with latest SEBI ESG rating guidelines

Rating Methodology and Significance

SES ESG Research Private Limited conducted the assessment using publicly available information from Mahindra & Mahindra Financial Services Limited pertaining to FY 2024-25. The rating reflects the company's performance across environmental sustainability, social responsibility, and governance practices.

The company has made the regulatory filing available on its official website under the investor relations section, ensuring transparency and accessibility for stakeholders. This ESG rating upgrade demonstrates the company's commitment to sustainable business practices and enhanced governance standards.