M&M Financial Services Secures Top-Tier Credit Ratings from CRISIL and India Ratings

M&M Financial Services has received a strong vote of confidence from two leading credit rating agencies, reinforcing its robust financial position in the market. Both India Ratings & Research Private Limited and CRISIL Ratings Limited reaffirmed their highest ratings for various financial instruments of the company.

India Ratings & Research Assessment

India Ratings has assigned its top-tier 'IND AAA' rating with a Stable outlook to several of M&M Financial's debt instruments:

Instrument	Rated Amount	Rating
Retail Non-convertible Debentures	INR 80 billion	IND AAA/Stable
Private Subordinated Debt	INR 54.5 billion	IND AAA/Stable
Fixed Deposits	INR 120,000 million	IND AAA/Stable
Commercial Paper	INR 150,000 million	IND A1+

The 'IND AAA' rating indicates the highest degree of safety regarding timely servicing of financial obligations, while 'IND A1+' represents the strongest degree of safety for short-term instruments.

CRISIL Ratings Reaffirmation

CRISIL Ratings has also maintained its 'CRISIL AAA/Stable' rating for M&M Financial's long-term debt instruments:

Instrument	Rated Amount (Rs. in Crore)	Rating
Non-Convertible Debentures	32,875.00	CRISIL AAA/Stable
Subordinated Debt	5,113.50	CRISIL AAA/Stable
Fixed Deposit	18,000.00	CRISIL AAA/Stable
Commercial Paper	17,000.00	CRISIL A1+

The 'CRISIL AAA' rating denotes the highest degree of safety regarding timely fulfillment of financial obligations, indicating that these instruments carry the lowest credit risk.

Implications for Investors and the Company

These rating reaffirmations are significant for M&M Financial Services as they:

Reflect the company's strong financial health and ability to meet its financial commitments.
Potentially lower borrowing costs for the company, as higher ratings typically translate to more favorable interest rates.
Enhance investor confidence, particularly for those considering the company's fixed deposits or debt instruments.
Underscore the company's stable outlook in the financial services sector.

M&M Financial Services has informed the BSE and NSE about these rating reaffirmations, adhering to SEBI listing regulations and ensuring transparency with its stakeholders.

For more detailed information on the company's credit ratings, investors can visit the official M&M Financial Services website under the 'Investor Relations' section.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-2.91%	+6.06%	+16.97%	+36.39%	+33.02%	+114.92%

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.