M&M Financial Services posted a mixed set of numbers in its Q4FY25 earnings. The company reported a 9% YoY decline in net profit to ₹563.1 crore, while net interest income (NII) rose 12.1% YoY to ₹2,151.2 crore. Despite growth in interest income, profitability was impacted by elevated credit costs and muted disbursal growth. Here’s what top brokerages are saying:
Morgan Stanley on M&M Finance share price
Morgan Stanley has maintained an Equal-weight rating on the stock with a target price of ₹290. The Q4 PAT miss was driven by a lower-than-expected pre-provision operating profit (PPOP). However, the firm highlighted that bad loan formation and credit costs came in better than estimates. Morgan Stanley has cut its FY26 earnings forecast on expectations of lower loan growth and higher credit costs, though it sees scope for FY27 earnings improvement on the back of gradually declining funding costs.
Goldman Sachs on M&M Finance share price
Goldman Sachs has retained a Sell rating with a target price of ₹224. The brokerage noted that operational performance missed expectations, with PPOP growth at 3% falling 2% short of its estimate due to weaker NIMs and higher operating expenses. Although credit costs were lower than expected, leading to an in-line PAT, overall business momentum remained sluggish. The only bright spots were in tractor and SME financing segments, while total disbursements declined 6% QoQ.
Nomura on M&M Finance share price
Nomura has maintained a Reduce rating and set a target price of ₹230. The brokerage expressed concerns over elevated credit costs and subdued RoE profile. Credit costs rose to 1.6%, driven by higher write-offs in the fourth quarter. Management has guided for credit costs to remain in the 1.3%–1.7% range over the medium term, but Nomura continues to assume a higher credit cost range of 1.8%–1.9% over FY26–28, reflecting its conservative stance on the company’s asset quality.
Nuvama on M&M Finance share price
Nuvama has given a Hold rating with a target price of ₹280. The brokerage flagged a miss on net interest income (NII), weak disbursal growth, and higher credit costs in Q4. Yields fell 30bps QoQ due to a one-time hit from a change in the interest charging method. While NII rose 6% YoY, operating expenses remained elevated at 2.9% and credit costs surged to 1.5% from near zero in the prior quarter. PPOP declined 1% QoQ and PAT was down 37%. Nuvama expects credit costs to remain in the 1.3%–1.7% range, with operating expenses staying below 2.7%.
With growth remaining tepid and asset quality challenges persisting, the outlook for M&M Financial Services remains cautious. Investors are expected to closely monitor the company’s ability to contain credit costs and revive disbursals in the coming quarters.
Disclaimer: The views expressed are those of individual brokerages and do not represent those of the author or publication. Investors are advised to consult certified financial advisors before making any investment decisions.
