The brokerage noted that GS2+3% remained stable sequentially, unlike the deterioration seen last year, and said the lender continues to benefit from strong tractor financing demand.
Morgan Stanley remained more reserved with an ‘Equal-Weight’ stance and a ₹300 target. It flagged a 4% beat in core operating profit, but a PAT miss of 8% as credit costs inched up in tandem with coverage build-up.The brokerage raised EPS estimates by 3% for FY26 and 1% for FY27, factoring in better margins and fee income, but said upside appears capped at current valuations despite downside support from franchise strength.
Solid earnings underpin outlookM&M Fin reported a 45% surge in net profit to ₹564 crore for Q2 FY26 (Q2 FY25: ₹389 crore), supported by margin gains and higher yields. Net interest income (NII) increased 14.6% YoY to ₹2,279 crore.
The lender’s loan book expanded 13% YoY, while disbursements grew 3% to ₹13,514 crore. Growth skew remained visible — tractor disbursements jumped 41% YoY, and SME lending was up 12%, while other vehicle categories were flat to lower year-on-year. Management expects festive-season traction to broaden recovery in the second half.
Asset quality stayed within guided ranges, with Stage 3 loans at 3.9% and GS2+GS3 at 9.7%. Credit cost stood at 2.2%, and collection efficiency remained steady at 96%. Provision coverage was robust at 53%, supporting portfolio protection.
On liquidity and capital, capital adequacy stood at 19.5% (Tier-1 at 16.9%), while a liquidity buffer of ₹8,572 crore offered flexibility for growth and risk management.
The company said it continues to diversify beyond vehicle financing, with the non-vehicle loan book rising 33% YoY through expansion in SME credit, leasing via Quiklyz, and fee-based income streams backed by tech and analytics investments.
