Mahindra & Mahindra Financial Services announced its financial results for the fourth quarter and fiscal year ended March 31, 2025, reporting strong growth in profitability and assets under management, along with improvements in asset quality.

Key Highlights

• FY25 standalone net profit grew 33% year-on-year to Rs 2,345.00 crore
• Assets under management increased 17% to Rs 119,673.00 crore
• Board recommends dividend of Rs 6.50 per share (325%)
• Q4 FY25 standalone net profit at Rs 563.00 crore, down 9% YoY
• Q4 results show improved asset quality, though Net Interest Margins (NIMs) declined

Financial Performance

For the full fiscal year 2025, Mahindra Finance reported:

The company's loan book grew 17% year-on-year to Rs 116,214.00 crore as of March 31, 2025. Disbursements for FY25 stood at Rs 57,900.00 crore, a 3% increase over the previous year.

Asset Quality

• Gross Stage 3 assets: 3.7% (as of March 31, 2025), compared to 3.4% a year ago
• Net Stage 3 assets: 1.8%, up from 1.3% last year
• Provision coverage ratio: 51.2% on Stage 3 assets

Capital Adequacy and Liquidity

• Capital adequacy ratio: 18.3% as of March 31, 2025
• Tier-I capital: 15.2%
• Liquidity buffer: Approximately Rs 10,400.00 crore

Management Commentary

Raul Rebello, Managing Director & CEO, stated: "We are pleased to report a strong 33% growth in profitability for FY25, driven by robust growth in our core vehicle financing business and new growth engines like SME lending. Our asset quality remains stable, and we continue to maintain a prudent provisioning approach. Looking ahead, we remain focused on sustainable growth while maintaining asset quality and profitability."

Other Updates

• The Board has recommended a dividend of Rs 6.50 per equity share (325%) for FY25, subject to shareholder approval.
• The company plans to seek shareholder approval to increase its borrowing limit from Rs 130,000.00 crore to Rs 150,000.00 crore.
• Dr. Rebecca Nugent has been re-appointed as an Independent Director for a second term of 5 years, effective March 5, 2026.

Mahindra Finance continues to strengthen its position as a leading non-banking financial company focused on rural and semi-urban markets in India. The company's diversified product portfolio and extensive branch network position it well for sustained growth in the coming years.

Mahindra & Mahindra Financial Services Limited (M&M Financial) has reported a mixed financial performance for the fiscal year 2025, with a significant increase in full-year profitability but a decline in Q4 earnings. The non-banking finance company, focused on rural and semi-urban markets, has also announced a generous dividend for its shareholders.

Key Financial Highlights for FY25

• Net profit surged by 33% year-on-year to Rs 2,345.00 crores
• Total income grew by 19% to Rs 16,075.00 crores
• Loan book expanded by 17% to Rs 1,16,214.00 crores
• Gross Stage 3 assets stood at 3.70%, slightly up from 3.40% in FY24

Q4 FY25 Performance

For the fourth quarter ended March 31, 2025, M&M Financial reported:

• Net profit of Rs 563.00 crores, down 9% from Rs 619.00 crores in Q4 FY24
• Net interest income grew 9% to Rs 2,156.00 crores
• Total income increased by 15% to Rs 4,245.00 crores
• Disbursements rose by 2% to Rs 15,530.00 crores
• Provisions increased 34% to Rs 457.00 crores
• Interest margin narrowed to 6.50% from 7.10%

Dividend Declaration

The Board of Directors has recommended a final dividend of Rs 6.50 per equity share (325%) for FY25, subject to shareholders' approval at the upcoming Annual General Meeting.

Asset Quality and Provisioning

The company maintained a stable asset quality profile:

• Gross Stage 3 assets were at 3.70% of the loan book as of March 31, 2025
• Net Stage 3 assets stood at 1.80%
• Provision coverage ratio for Stage 3 assets was 51.20%

Business Growth and Diversification

M&M Financial continued to expand its core vehicle financing business while also focusing on diversification:

• Tractor financing disbursements grew by 8% year-on-year
• SME loan disbursals increased by 48% compared to FY24
• The company obtained a corporate agency license, partnering with 10 insurance companies

Management Commentary

Ramesh Iyer, Vice Chairman & Managing Director of M&M Financial, stated, "Our focus on operational excellence and strategic diversification has yielded positive results. The significant growth in our SME portfolio and the expansion of our insurance distribution capabilities demonstrate our commitment to providing comprehensive financial solutions to emerging India."

Future Outlook

The company outlined its priorities for the coming year:

1. Sustaining growth and profitability in the core vehicle financing business
2. Accelerating growth in SME financing, leasing, and fee income
3. Maintaining asset quality and credit cost levels
4. Continuing to build a resilient operating model through technology and data analytics

M&M Financial's strong full-year performance in FY25 reflects its ability to capitalize on the growing demand for financial services in rural and semi-urban India. However, the Q4 results indicate some challenges, including margin pressure and increased provisioning. The company's strategic focus on diversification and operational efficiency will be crucial for navigating these challenges and sustaining growth in the evolving financial services landscape.

As M&M Financial continues to strengthen its position in the rural and semi-urban financial services sector, investors and stakeholders will be watching closely to see how the company addresses the challenges highlighted in the Q4 results and capitalizes on emerging opportunities in FY26.