M&M Financial Services has announced a significant addition to its leadership team. The company's Board of Directors has approved the appointment of Mr. Parag Rao as an Additional Director in a non-executive and non-independent capacity, effective December 10, 2025.

Key Appointment Details

Background and Experience

Mr. Parag Rao brings over three decades of diverse experience in the Banking and FMCG sectors to M&M Financial Services. His appointment follows a recommendation by the company's Nomination and Remuneration Committee, highlighting the strategic nature of this addition to the board.

Professional Highlights

• HDFC Bank Association: Mr. Rao has been with HDFC Bank since 2002, where he has managed multiple P&Ls and led large Pan-India teams.
• Leadership in Payments: Since 2010, he has played a crucial role in establishing and maintaining HDFC Bank's market leadership in the payments and acquiring spaces.
• Technology and Digital Transformation: He headed the Technology & Digital Transformation function at HDFC Bank, driving the bank's technology and digital transformation agenda.
• Product Management: Recent responsibilities included heading the liability product management group of HDFC Bank.

Board Experience

Mr. Rao's expertise extends to various board positions, including:

• HBL Global (HDFC Bank's Sales Subsidiary, later merged with HDB Financial Services)
• HDFC Ergo (Non-Life Insurance subsidiary of HDFC Bank)
• National Payment Corporation of India (NPCI)

Additionally, he has served on the Asia Pacific Client Council of VISA Inc and the Global Advisory Board of Diners International Inc.

Educational Background

This appointment underscores M&M Financial Services' commitment to strengthening its board with experienced professionals from the financial services sector. Mr. Rao's extensive background in banking, digital transformation, and product management is expected to bring valuable insights to the company as it navigates the evolving landscape of financial services in India.

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.