Mahindra Finance reported a 55% year-on-year (YoY) rise in its Q2 Profit to ₹882 crore in the July-September quarter of FY27 (Q2FY27). The company’s total income grew 15% YoY to ₹5,175 crore. Disbursements also increased 22% to ₹16,499 crore during the quarter.
The Q2 Profit growth came alongside an improvement in asset quality and lower credit costs. Business assets under management (AUM) rose 15% YoY to ₹1.46 trillion. However, net interest margin (NIM) remained flat at 7% compared with the year-ago quarter.
Credit costs declined to 1.6% of average assets in Q2FY27 from 2.2% in Q2FY26. The results reflect stronger lending activity and an improvement in the company’s loan portfolio.
Q2 Profit Growth Accompanies Better Asset Quality
Mahindra Finance recorded an improvement in asset quality during the quarter, with both Stage 2 and Stage 3 assets declining from their year-ago levels.
Stage 3 assets fell to 3.4% from 3.9% in Q2FY26. Stage 2 assets also declined to 4.7% from 5.8% over the same period. These figures indicate a reduction in stress across the company’s loan portfolio.
Collection efficiency, which measures the collection of payments due, improved to 97% from 96% a year earlier. The company’s capital adequacy ratio stood at 18%, while Tier-I capital was 16.2%.
Key Highlights
- Q2 Profit: Rose 55% YoY to ₹882 crore.
- Disbursements: Increased 22% YoY to ₹16,499 crore.
- Credit costs: Declined to 1.6% from 2.2% a year earlier.
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Non-Vehicle Lending Supports Business Diversification
Mahindra Finance continued to expand beyond vehicle financing, with disbursements from its non-vehicle finance businesses growing 52% YoY. These businesses include small and medium enterprise (SME) lending, personal loans, other lending segments, and Mahindra Rural Housing Finance (MRHFL).
The growth highlights the company’s efforts to diversify its lending portfolio and build additional business opportunities beyond its traditional vehicle finance operations. This expansion also contributed to the broader business momentum during the quarter.
Commenting on the results, Raul Rebello, Managing Director and Chief Executive Officer of Mahindra Finance, said the company’s Q2 performance showed that its ongoing changes were delivering stronger and more consistent business outcomes.
He highlighted the 22% rise in disbursements, credit costs of 1.6%, and 55% profit growth. Rebello added that the company remained focused on disciplined execution as it works toward its FY31 ambitions.
Overall, Mahindra Finance’s Q2FY27 results combined higher earnings and disbursements with lower credit costs and improved asset quality. The Q2 Profit increase also came alongside stronger non-vehicle lending, supporting the company’s diversification strategy.
