M&M Financial Services management conducted its Q3FY26 earnings conference call on January 28, 2026, providing detailed insights into the company's quarterly performance and strategic direction. The call was hosted by Kotak Institutional Equities and featured key executives including Managing Director & CEO Raul Rebello, CFO Pradeep Agrawal, and Chief Business Officer Sandeep Mandrekar.

Business Transformation Completion

CEO Raul Rebello announced the completion of the company's business transformation project called "Udaan," which has been driving capability building over the past couple of years. The transformation has resulted in significant operational improvements across customer and dealer fronts.

Profitability and Financial Performance

The management highlighted a visible step-up in profitability for Q3FY26, with the company achieving a quarterly ROA of 2.5%. For the nine months of FY26, ROA improved to 1.9%, moving closer to the management's target of 2% ROA.

Asset Quality Stabilization

The company reported continued stabilization in asset quality metrics, with Gross Stage 3 (GS3) remaining below 4% for the eighth consecutive quarter. The combined GS2 plus GS3 ratio was maintained below 10% for the same period.

Growth Strategy and Market Performance

Management emphasized the company's pivot to growth, supported by strong performance in the tractor financing segment. Q3FY26 recorded the highest-ever Q3 disbursements, driven primarily by tractor finance growth of 65%.

NIM Expansion and Fee Income Growth

The company reported NIM expansion of 50 basis points quarter-on-quarter to 7.5%, though management indicated that 7.1% for nine months is more representative due to one-time benefits. Fee and other income expanded to 1.4% from 1.1% in the previous year.

ECL Model Refresh and Provisioning

As part of the annual practice, the company conducted an Expected Credit Loss (ECL) model refresh in Q3FY26. Management created a management overlay of approximately ₹635 crore, maintaining the Provision Coverage Ratio (PCR) at 53% without taking benefits from the model refresh into the P&L.

Strategic Initiatives

The management announced plans to evaluate merging Mahindra Rural Housing Finance Limited (MRHFL) with the parent company to create operational efficiencies in the mortgage business. The 100% subsidiary has shown improved asset quality with GS3 below 3% for the last two quarters.

The earnings call concluded with management expressing confidence in achieving their medium-term ROA targets while maintaining asset quality discipline and pursuing strategic diversification initiatives.

The International Financial Services Centres Authority (IFSCA), the financial services regulator for India's Gujarat International Finance Tech (GIFT) City, has unveiled comprehensive proposals to regulate algorithmic trading on local exchanges. The measures, detailed in a consultation paper published on Tuesday, January 20, aim to establish robust safeguards around automated trading strategies that have gained significant traction among retail investors.

Algorithmic trading, which enables investors to execute automated strategies through computer programmes, has experienced substantial growth in recent years. The popularity stems from its ability to offer faster execution speeds and reduced costs compared to traditional trading methods, making it particularly attractive to retail investors seeking efficient market participation.

Mandatory Exchange Permissions and Algorithm Audits

The proposed regulatory framework introduces several key requirements for market participants. Under the new rules, any market participant seeking to undertake algorithmic trading would need prior permission from the relevant exchange before commencing operations.

IFSCA has also proposed that exchanges conduct comprehensive audits of algorithms used by both existing and prospective participants. According to the authority, this measure is designed "to ensure that the risk control checks… are in place and that the market participant's algorithmic trading system facilitates orderly trading and market integrity."

Risk Management and Market Integrity Measures

The consultation paper outlines additional safeguards to prevent market manipulation and maintain trading stability. IFSCA proposes establishing "dummy filters" specifically for securities that lack price bands but attract significant algorithmic trading interest. This mechanism would provide an additional layer of protection for volatile securities.

The proposed framework grants exchanges flexibility to impose financial disincentives, including penalties, in cases where market participants place orders that significantly outnumber executed trades. IFSCA stated this approach would "provide sufficient deterrence against order flooding or any other form of market manipulation."

Regulatory Response to Market Evolution

These proposals represent IFSCA's proactive approach to managing the evolving landscape of algorithmic trading within GIFT City's financial ecosystem. The measures balance the need to accommodate technological advancement in trading while ensuring robust risk management and market integrity standards.

The consultation paper reflects the regulator's commitment to creating a well-supervised environment that supports innovation while protecting market participants from potential risks associated with automated trading systems. The proposed rules aim to establish clear guidelines for algorithmic trading operations while maintaining the flexibility necessary for market development.