M&M Financial Services has reported a strong performance for the second quarter of fiscal year 2026, marked by improved margins and stable asset quality.

Key Financial Highlights

• Net Interest Margin (NIM) expanded to 7.00% from 6.50% year-on-year
• Profit After Tax (PAT) grew by 25% to Rs. 1,100.00 crores for the half-year period
• Asset quality remained stable with Gross Stage 2 (GS2) plus Gross Stage 3 (GS3) at 9.70%
• Tractor business showed robust growth of 41%

Margin Improvement and Asset Quality

M&M Financial Services witnessed a significant improvement in its Net Interest Margin, which expanded from 6.50% to 7.00% year-on-year. This expansion was primarily driven by an improvement in the cost of funds and growth in fee-based income. The company's focus on maintaining asset quality was evident as the combined Gross Stage 2 and Gross Stage 3 assets remained stable at 9.70%, which is lower than the previous year's Q2 levels.

Strong Growth in Key Segments

The tractor business emerged as a standout performer, registering a robust growth of 41%. This strong performance can be attributed to positive conditions in the rural economy. The company's trade advances also saw a substantial increase, rising to Rs. 6,800.00 crores during the festive season, compared to around Rs. 4,000.00 crores in the previous quarter.

Credit Cost Guidance

Despite the challenging environment typically associated with Q2, M&M Financial Services has maintained its credit cost guidance of 1.70% for the full year. This indicates the company's confidence in its risk management strategies and the overall quality of its loan book.

Management Commentary

Raul Rebello, Managing Director & CEO of M&M Financial Services, expressed optimism about the company's performance in the second half of the fiscal year. He cited recent GST rate cuts and festive demand as positive drivers, particularly for the passenger vehicle and tractor segments.

Outlook

The management remains positive about the company's prospects for the second half of FY'26. They anticipate continued momentum in key segments, particularly benefiting from the recent GST rate reductions and strong festive season demand. The company is well-positioned to capitalize on the expected growth in the rural economy and the automotive sector.

Conclusion

M&M Financial Services' Q2 FY'26 results demonstrate the company's resilience and strategic focus on improving margins and maintaining asset quality. With a strong performance in key segments like tractors and a positive outlook for the second half, the company appears well-positioned for sustained growth in the coming quarters.

M&M Financial Services has announced significant updates to its insider trading policies, reported robust financial results for the second quarter, and made key changes to its senior management.

Senior Management Changes

M&M Financial Services Limited has announced important changes in its senior management:

• Ms. Aarti Nihalani has been appointed as Chief Operating Officer, effective December 1, 2025. She brings 16 years of consulting experience in financial services and is currently Partner of Financial Services for Oliver Wyman India. Ms. Nihalani holds a PG Diploma from IIM Ahmedabad and received the IIM Ahmedabad Young Alumni Achiever Award for Corporate Leadership in 2024.

• Ms. Padmaja Chunduru has been appointed as an Additional Director (Independent and Non-Executive) on the company's board, effective from November 10, 2025, for a term of 5 consecutive years until November 9, 2030, subject to shareholder approval within 3 months. Chunduru brings over 37 years of banking and capital markets experience in India and USA, having served as MD & CEO of NSDL and Indian Bank, and as Deputy Managing Director of State Bank of India. She currently serves as an Independent Director on multiple company boards including Bajaj Life and General Insurance Companies, Atul Ltd, and Brigade Enterprises Ltd.

• Mr. Shiv Kumar NV, Head of Small and Medium Enterprises, has resigned effective October 28, 2025, to pursue external opportunities.

Code of Practices Update

On October 28, M&M Financial's Board of Directors approved amendments to the company's Code of Practices and Procedure for Fair Disclosure of Unpublished Price Sensitive Information. These changes align with recent modifications to the SEBI (Prohibition of Insider Trading) Regulations, 2015, particularly addressing the revised definition of Unpublished Price Sensitive Information (UPSI) effective from June 10.

The updated code now incorporates certain 'material events' as per Regulation 30 of SEBI Listing Regulations within the UPSI definition. This marks the fourth revision of the code since its initial implementation in May 2015, reflecting the company's commitment to maintaining transparency and compliance with evolving regulatory standards.

Q2 Financial Highlights

M&M Financial has reported a strong financial performance for Q2:

The company's net profit saw a significant year-on-year growth of 54%, rising from Rs 369 crores in the previous Q2 to Rs 569 crores in the current Q2. This growth was supported by a 14% increase in total income, which reached Rs 4,489 crores.

Assets Under Management (AUM) grew by 13% to Rs 127,246 crores, indicating robust business expansion. Disbursements also showed a modest increase of 3%, totaling Rs 13,514 crores for the quarter.

Asset Quality and Capital Adequacy

M&M Financial maintained a stable asset quality profile:

• Gross Stage 3 assets stood at 3.9% as of September 30, compared to 3.8% a year ago.
• The Stage 3 coverage ratio improved to 53.0% from 51.4% in the previous quarter.

The company's capital position remained strong, with a Capital Adequacy Ratio of 19.5%, well above regulatory requirements. The Tier I capital stood at 16.9%, ensuring a solid foundation for future growth.

Management Commentary

Ramesh Iyer, Vice Chairman & Managing Director of M&M Financial Services, commented on the results: "Our Q2 performance reflects the resilience of our business model and the effectiveness of our strategic initiatives. The significant growth in net profit and the steady increase in AUM demonstrate our ability to capitalize on market opportunities while maintaining prudent risk management practices."

M&M Financial's updated insider trading code, strong financial results, and strategic management changes underscore the company's commitment to regulatory compliance and sustainable growth in the competitive financial services sector.