M&M Financial Services’ Q1FY26 results have drawn cautious commentary from brokerages, with Macquarie and UBS flagging credit cost concerns and subdued near-term growth outlook. While UBS retained a neutral view, Macquarie remains bearish, citing structural return concerns.
Macquarie has maintained its Underperform rating on the stock with a target price of ₹235 per share, implying a 12% downside from the current market price of ₹266.40. The brokerage said Q1 PAT missed estimates due to higher credit costs, which were only partially offset by margin improvement. It also pointed out that net interest margin (NIM) included a one-off dividend impact, suggesting the performance may not be repeatable. Macquarie expects sustainable return on assets (RoA) to remain lower than peers, limiting rerating potential.
UBS retained its Neutral rating and cut the target price to ₹285, projecting a 7% upside. The brokerage also noted a PAT miss on account of elevated credit costs, but highlighted slight beats on net interest income (NII) and pre-provision operating profit (PPoP). However, UBS flagged that the overall outlook remains soft, with FY26 growth likely to stay subdued. It acknowledged management’s mid-teens growth guidance for the medium term but pointed to persistent challenges in the entry-level passenger vehicle (PV) and commercial vehicle (CV) segments.
Disclaimer: The brokerage views expressed above are solely those of the respective firms. This article does not constitute investment advice. Readers are advised to consult their financial advisor before making any investment decisions.
