Mahindra Finance Q4 Profit Up 55% YoY; Board Proposes Rs 7.50 Dividend
Mahindra Finance's standalone profit jumped 55% in Q4 FY26, while annual profit rose 19%, supported by 12% asset growth and wider margins.
- ₹873 crore (up 55% YoY)
- ₹2,782 crore (up 19% YoY)
- ₹1,34,096 crore (up 12% YoY)
- ₹7.50 per share
What Happened
The board of Mahindra & Mahindra Financial Services Ltd approved audited results for the quarter and year ended March 31, 2026, and proposed a final dividend of ₹7.50 per fully paid equity share (375% of face value of ₹2), up from ₹6.50 per share last year. On a standalone basis, profit after tax rose 55% year-on-year in Q4 FY26 to ₹873 crore, post a management overlay, and rose 19% in full-year FY26 to ₹2,782 crore, post labour code and management overlays. Business AUM stood at ₹1,34,096 crore, up 12% year-on-year, while quarterly disbursements reached ₹17,184 crore, up 11%.
“This year's progress across growth, margins and risk was driven by disciplined execution and resulted in a tangible step-up in profitability. Continued investments in our core vehicle franchise, new growth categories, and technology will support sustainable growth and profitability.”
- ₹17,184 crore vs ₹15,530 crore (+11%)
- ₹4,810 crore vs ₹4,245 crore (+13%)
- ₹873 crore vs ₹563 crore (+55%)
Full-year standalone disbursements grew 6% to ₹61,118 crore and total income rose 15% to ₹18,500 crore. Net interest income rose 27% in Q4 to ₹2,739 crore and 24% for the year to ₹10,108 crore; net interest margin expanded to 7.5% in Q4 and 7.1% for the year, helped by higher fee income and lower cost of funds. Pre-provisioning operating profit rose 42% in Q4 to ₹1,722 crore and 31% for the year to ₹6,231 crore. Credit costs stood at ₹560 crore in Q4 (1.5% of average assets, vs 1.4%) and ₹2,441 crore for the year (1.7% vs 1.3%), both including overlays, while return on assets was 2.4% in Q4 and 2.0% for the year, versus 1.7% and 1.9% a year earlier.
Asset quality improved, with gross Stage 3 assets at 3.4%, Stage 2 at 4.8%, and GS2 plus GS3 at 8.2%. Business assets grew 12% year-on-year, driven by tractors, passenger vehicles and MSME-led secured lending products. Collection efficiency improved to 98% in Q4 FY26 from 97% a year earlier, aided by new stack adoption, digital workflows, data-led prioritization, and sharper focus on early delinquencies. Tractor disbursements grew 63% year-on-year during the quarter, driven by consistent efforts to pivot toward profitable growth, and demand momentum remained positive after GST rate cuts despite geopolitical headwinds. Capital adequacy stood at 18.8%, Tier-1 capital at 16.7%, provision coverage on GS3 at 59% through a management overlay, and the total liquidity buffer was approximately ₹9,100 crore.
On a consolidated basis, total income rose 14% in Q4 to ₹5,560 crore and 14% in FY26 to ₹21,087 crore. Consolidated profit after tax was ₹940 crore in Q4 versus ₹456 crore a year earlier, and ₹2,861 crore for the year, up 27%. CRISIL, CARE Ratings, India Ratings and Brickwork reaffirmed Mahindra Finance's long-term debt ratings at AAA (Stable). The company also received a 'Significant Achievement in Domain Excellence' at the CII-ITC Sustainability Awards 2025 and ranked 4th in BW Businessworld's list of India's most sustainable companies.
- Maintained leadership in tractor financing and remained among the leading NBFCs for passenger vehicles, light commercial vehicles and used passenger vehicles.
- Non-vehicle finance portfolio grew 32% year-on-year across SME lending, mortgages, fee income, leasing, and life and general insurance offerings.
- SME asset book reached ₹8,090 crore, up 32%, with Loan Against Property growing 41%.
- Mortgage business sustained growth with GS3 below 3% and improved collections.
- Leasing expanded in B2B with strategic corporate customers, hybrid channel approach and stronger engagement.
- Digital initiatives included AI-driven early warning systems, customer self-service platforms, MTezz app scaling, centralized processing, fraud-control frameworks and a streamlined retail branch struc
Why this matters
Mahindra Finance is a non-banking finance company focused on rural and semi-urban India, with more than 12 million customers. The results show resilient demand for vehicle and tractor loans—tractor disbursements grew 63%—and a deliberate shift into SME, mortgage, and leasing businesses, which expanded 32% outside vehicle finance. A healthy capital position and AAA credit ratings should let the lender continue funding growth.
Terms in This Story
- PAT
- Profit after tax — a company's net earnings after all expenses and taxes are deducted.
- AUM
- Assets under management — the total value of loans and investments a financial firm manages on behalf of customers.
- NIM
- Net interest margin — the difference between interest earned on loans and interest paid on deposits, expressed as a percentage of assets.
- GS3
- Gross Stage 3 assets — loans that are significantly past due or impaired under the expected credit loss framework.
Summarised from the linked release; details can be imperfect — always verify against the original source.