M&MFIN shares sank 9% to ₹278.3 on the NSE after the company released its Q2 earnings, with PAT up 55% YoY and a 12% beat over consensus. The pre‑provisional operating profit also jumped 20% from a year earlier, while the net interest margin compressed by 30 basis points.
CLSA kept its "outperform" stance, citing higher fee income and lower credit costs, but lowered its target price to ₹405, an upside of 35.9% from the close. Citi, Nomura and HSBC all maintained "buy" ratings; Citi’s target rose to ₹420 (+40.9% upside), Nomura cut its target to ₹400 (+39.3% upside), and HSBC trimmed its target to ₹340 (+1.5x FY28 book value). All analysts noted a 15‑basis‑point decline in net slippages and a multi‑year low in the stage‑2/3 loan ratio.
Disbursement growth accelerated 22% YoY, with passenger vehicles up 28%, pre‑owned vehicles 15%, commercial vehicles 16% and tractors 13%. This translated to a 15% rise in assets under management. Gross stage‑3 and GS2 ratios improved to 3.42% and 4.7% respectively, while loan spreads narrowed 30 basis points as the book tilted toward trade advances.
The company’s guidance for FY27‑29 remains positive, though HSBC noted rising pressure on net interest margin and fee income. Analysts expect continued AUM growth and tighter credit costs, but warn of potential headwinds from rural disbursement reforms. The stock’s 21% decline over the last month and 31% YTD loss underline the volatility investors face.
Going forward, M&MFIN will report FY27 results in March. Market participants will be watching for any adjustment in the company’s earnings guidance and for how the loan‑book composition adapts to the current rate‑hike cycle.