Morgan Stanley has maintained its ‘Equal-weight’ rating on Mahindra & Mahindra Financial Services (MMFS), with a target price of ₹290, after the company’s Q4FY25 results showed mixed operational performance.
The brokerage noted that the PAT miss was primarily due to a lower-than-expected PPOP, though this was partially offset by better-than-anticipated bad loan formation and credit costs.
In Q4, net profit declined 9% YoY to ₹563.1 crore, while net interest income (NII) rose 12.1% YoY to ₹2,151.2 crore. Disbursals were weak, up just 1.6% YoY and down 5.7% QoQ, indicating muted growth momentum. However, AUM expanded 17.4% YoY, and other income rose 23% sequentially. Provisions increased 26.6% QoQ to ₹635.1 crore, while slippages declined 6.5% QoQ.
Morgan Stanley has cut FY26 earnings estimates, factoring in softer loan growth and slightly elevated credit costs, but expects lower funding costs to support FY27 earnings recovery.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.
