Macquarie has reiterated its Underperform rating on M&M Financial Services, setting a target price of ₹235 per share. This indicates a downside from the current market price of ₹266.40.
The brokerage highlighted that the company’s Q1 PAT fell short of expectations, primarily due to higher credit costs. This negative impact was partly cushioned by an improvement in margins. However, Macquarie cautioned that the reported net interest margin (NIM) for the quarter included a one-off benefit related to dividend income, and may not be sustainable going forward.
Management has guided for a credit cost of 1.7% for FY26, which Macquarie believes could constrain profitability. The firm also pointed out that M&M Financial’s sustainable return on assets (RoA) is expected to remain structurally lower than that of its peers, raising concerns about long-term competitiveness and valuation support.
Disclaimer: The brokerage views expressed above are those of Macquarie. This article does not constitute investment advice. Readers are advised to consult their financial advisor before making any investment decisions.
