Mahindra Finance Reports 70% Rise In Q1 FY27 Profit; Records Highest-Ever First Quarter Disbursements
Mumbai: Mahindra & Mahindra Financial Services Limited (Mahindra Finance), one of India's leading non-banking financial companies (NBFCs), has reported a strong financial performance for the first quarter of FY27, driven by record disbursements, healthy growth in assets under management and improved profitability.
The company posted a 70% year-on-year (YoY) increase in Profit After Tax (PAT) to ₹899 crore, while Return on Assets (RoA) improved to 2.4%, reflecting strong operational performance and disciplined business growth.
Mahindra Finance recorded its highest-ever first-quarter disbursements of ₹15,564 crore, registering 22% YoY growth compared with ₹12,808 crore in Q1 FY26. The growth was primarily driven by strong demand in the tractor segment, which grew 45% YoY, and passenger vehicle financing, which increased 24% YoY.
The company's Business Assets Under Management (AUM) stood at ₹1,37,449 crore, up 13% YoY from ₹1,22,008 crore in the corresponding quarter last year.
Total income for the quarter increased 12% YoY to ₹4,974 crore, compared with ₹4,438 crore in Q1 FY26.
Net Interest Margins (NIM) rose to ₹2,766 crore, registering 21% YoY growth. The NIM margin improved to 7.3%, up from 6.7% a year ago, expanding by approximately 55 basis points.
Pre-Provisioning Operating Profit (PPOP) also recorded healthy growth, increasing 30% YoY to ₹1,756 crore, compared to ₹1,353 crore in Q1 FY26.
Credit Costs declined to ₹570 crore, down from ₹660 crore in the previous year, while the Credit Cost ratio improved to 1.5%, compared with 1.9% in Q1 FY26, representing an improvement of around 44 basis points.
The company's portfolio quality also remained stable, with Stage 3 assets improving to 3.5%, compared with 3.8% in the year-ago quarter. Stage 2 assets declined to 4.9%, from 5.9%, indicating better slippage control and portfolio stability.
Collection efficiency remained steady at 95%, matching the level recorded in Q1 FY26.
The company reported a Capital Adequacy Ratio of 18.5%, with Tier-1 Capital at 16.5%. Provision Coverage on GS3 stood at 58%, while the company maintained a comfortable liquidity buffer of over ₹14,650 crore.
Its flagship transformation programme, Udaan, is now fully integrated across vehicle lending, servicing and collections.
Mahindra Finance also continued to diversify beyond vehicle financing. Non-vehicle finance disbursements grew 79% YoY, including Mahindra Rural Housing Finance Limited (MRHFL). The company added that its investments in digital and AI capabilities are helping improve customer acquisition, operational resilience and collection efficiency.
Commenting on the quarterly performance, Raul Rebello, MD & CEO, Mahindra Finance, said:
"Our performance this quarter underscores the strength of our franchise, with continued expansion in profitability, resilient asset quality, and progress in our pivot towards growth agendas. Our focused investments in our core vehicle franchise, new growth engines, and technology are supporting Profitable & Disciplined Growth."
On a consolidated basis, total income increased 14% to ₹5,725 crore, while Profit After Tax rose 75% to ₹927 crore during Q1 FY27.
With strong growth in profitability, record first-quarter disbursements and improved asset quality, Mahindra Finance has begun FY27 on a positive note. The company expects its continued focus on vehicle financing, digital transformation and new growth segments to support sustainable growth in the coming quarters.
The company posted a 70% year-on-year (YoY) increase in Profit After Tax (PAT) to ₹899 crore, while Return on Assets (RoA) improved to 2.4%, reflecting strong operational performance and disciplined business growth.
Record Disbursements And Strong AUM Growth
Mahindra Finance recorded its highest-ever first-quarter disbursements of ₹15,564 crore, registering 22% YoY growth compared with ₹12,808 crore in Q1 FY26. The growth was primarily driven by strong demand in the tractor segment, which grew 45% YoY, and passenger vehicle financing, which increased 24% YoY.
The company's Business Assets Under Management (AUM) stood at ₹1,37,449 crore, up 13% YoY from ₹1,22,008 crore in the corresponding quarter last year.
Higher Income And Improved Margins
Total income for the quarter increased 12% YoY to ₹4,974 crore, compared with ₹4,438 crore in Q1 FY26.
Net Interest Margins (NIM) rose to ₹2,766 crore, registering 21% YoY growth. The NIM margin improved to 7.3%, up from 6.7% a year ago, expanding by approximately 55 basis points.
Pre-Provisioning Operating Profit (PPOP) also recorded healthy growth, increasing 30% YoY to ₹1,756 crore, compared to ₹1,353 crore in Q1 FY26.
Asset Quality Continues To Improve
Mahindra Finance continued to strengthen its asset quality during the quarter.Credit Costs declined to ₹570 crore, down from ₹660 crore in the previous year, while the Credit Cost ratio improved to 1.5%, compared with 1.9% in Q1 FY26, representing an improvement of around 44 basis points.
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The company's portfolio quality also remained stable, with Stage 3 assets improving to 3.5%, compared with 3.8% in the year-ago quarter. Stage 2 assets declined to 4.9%, from 5.9%, indicating better slippage control and portfolio stability.
Collection efficiency remained steady at 95%, matching the level recorded in Q1 FY26.
Healthy Capital Position
Mahindra Finance maintained a strong balance sheet during the quarter.The company reported a Capital Adequacy Ratio of 18.5%, with Tier-1 Capital at 16.5%. Provision Coverage on GS3 stood at 58%, while the company maintained a comfortable liquidity buffer of over ₹14,650 crore.
Focus On Growth And Digital Transformation
The company continued to strengthen its leadership in tractor financing while remaining among the leading NBFCs in financing passenger vehicles, used passenger vehicles and light commercial vehicles.Its flagship transformation programme, Udaan, is now fully integrated across vehicle lending, servicing and collections.
Mahindra Finance also continued to diversify beyond vehicle financing. Non-vehicle finance disbursements grew 79% YoY, including Mahindra Rural Housing Finance Limited (MRHFL). The company added that its investments in digital and AI capabilities are helping improve customer acquisition, operational resilience and collection efficiency.
Commenting on the quarterly performance, Raul Rebello, MD & CEO, Mahindra Finance, said:
"Our performance this quarter underscores the strength of our franchise, with continued expansion in profitability, resilient asset quality, and progress in our pivot towards growth agendas. Our focused investments in our core vehicle franchise, new growth engines, and technology are supporting Profitable & Disciplined Growth."
On a consolidated basis, total income increased 14% to ₹5,725 crore, while Profit After Tax rose 75% to ₹927 crore during Q1 FY27.
With strong growth in profitability, record first-quarter disbursements and improved asset quality, Mahindra Finance has begun FY27 on a positive note. The company expects its continued focus on vehicle financing, digital transformation and new growth segments to support sustainable growth in the coming quarters.
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