1. At a Glance
A veteran in rural lending, Mahindra Finance has the pedigree and pan-India presence. But under the hood, the gears are grinding. Margins are bouncing like off-road SUVs, ROEs remain modest, and FIIs are ghosting the stock. Still, it has that “steady compounder in denial” vibe.
2. Introduction with Hook
Imagine being the reliable cousin at every wedding – never drunk, always helpful, but never the center of attention. That’s Mahindra Finance. While others like Bajaj Finance arrive in limos and throw confetti of tech-led growth, Mahindra Finance arrives in a Scorpio with a passbook.
- Revenue TTM: ₹19,138 Cr
- Net Profit TTM: ₹2,293 Cr
- ROE: A very “introvert at parties” 11%
3. Business Model (WTF Do They Even Do?)
MMFSL is a classic NBFC—rural at heart, granular in risk, and auto-heavy in exposure. They finance:
- Tractors and Utility Vehicles (core bread and butter)
- Pre-owned vehicles (aka “Second-hand Swag”)
- Commercial vehicles and SME loans
- Rural housing and insurance broking (because why not diversify into everything)
Focus on semi-urban and rural India where formal banking is either late or absent.
4. Financials Overview
Annual Trend (₹ Cr):
| Year | Revenue | PAT | EPS | ROE | Dividend Payout % |
|---|---|---|---|---|---|
| FY21 | 12,382 | 780 | 5.56 | 5% | 13% |
| FY22 | 11,419 | 1,150 | 8.18 | 7% | 39% |
| FY23 | 12,828 | 2,071 | 14.91 | 12% | 36% |
| FY24 | 15,963 | 1,943 | 13.90 | 10% | 40% |
| FY25 | 18,519 | 2,261 | 16.27 | 11% | 35% |
Q1 FY26 PAT: ₹529 Cr
EPS: ₹3.80
Dividend (FY25): ₹6.50 per share
5. Valuation
Current Price: ₹266
Book Value: ₹155
P/E: ~16
P/B: ~1.7
Valuation Methods:
- P/E Method (Target 14x–18x): ₹229 – ₹295
- P/B Method (Target 1.5x–2x): ₹232 – ₹310
- DCF-esque guesstimation: ₹250–₹280 (factoring stable ~10–11% ROE and ~15% growth)
Fair Value Range: ₹230 – ₹295
Upside? Yes. Multibagger? Calm down.
6. What’s Cooking – News, Triggers, Drama
- Rights Issue: ₹2,996 Cr raised—already deployed per monitoring report.
- Q1 FY26 EPS up 16% YoY. Not thrilling, not depressing.
- Dividend stable, AGM cleared raising borrowing limits to ₹1.5 lakh Cr.
- FIIs Exit: FII shareholding slipped to 9.33% from ~17% two years ago.
- DIIs Love It: Up to 32.33%, likely enjoying the relative stability.
- No tech-driven fireworks unlike Bajaj Fin or Chola.
7. Balance Sheet
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| Net Worth | ₹18,560 Cr | ₹19,933 Cr | ₹21,529 Cr |
| Borrowings | ₹81,429 Cr | ₹100,215 Cr | ₹119,093 Cr |
| Total Assets | ₹105,085 Cr | ₹123,716 Cr | ₹144,105 Cr |
Key Points:
- Borrowings have grown 3x since FY15.
- Leverage remains within acceptable NBFC norms.
- Fixed asset growth suggests infra upgrade.
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash |
|---|---|---|---|---|
| FY23 | -17,395 | -1,635 | 18,852 | -179 |
| FY24 | -18,449 | 2,671 | 16,095 | 317 |
| FY25 | -15,602 | -1,077 | 17,605 | 927 |
Observations:
- Operating cash flow often negative: Welcome to NBFC reality.
- Survives on debt market steroids, not free cash flows.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 12% | 10% | 11% |
| ROA | 2.3% | 1.9% | 1.9% |
| Interest Coverage | ~1.3x | ~1.2x | ~1.3x |
| GNPA/NNPA | Not disclosed here. Clean-ish? |
Verdict:
Solid but not spicy. Risk-reward is balanced like a Scorpio on a highway.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | Interest Cost | Expenses | Net Profit |
|---|---|---|---|---|
| FY23 | ₹12,828 Cr | ₹5,094 Cr | ₹4,696 Cr | ₹2,071 Cr |
| FY24 | ₹15,963 Cr | ₹6,959 Cr | ₹6,204 Cr | ₹1,943 Cr |
| FY25 | ₹18,519 Cr | ₹8,415 Cr | ₹6,832 Cr | ₹2,261 Cr |
Margins:
- Net margins trending ~12%
- Interest costs rising faster than topline = margin pressure alert
11. Peer Comparison
| Company | P/E | ROE % | PAT (₹ Cr) | Price/BV | Div Yld % |
|---|---|---|---|---|---|
| Bajaj Finance | 35.5 | 19.2 | 16,664 | 6.1x | 0.46% |
| Chola Invest | 30.9 | 19.7 | 4,263 | 5.6x | 0.13% |
| Shriram Finance | 14.7 | 15.6 | 8,209 | 2.1x | 1.55% |
| Muthoot Finance | 20.1 | 19.6 | 5,333 | 3.7x | 0.97% |
| M&M Finance | 16.1 | 10.9 | 2,293 | 1.7x | 2.45% |
Clearly, M&MFIN is the most rural, most affordable (valuation-wise), and least exciting.
12. Miscellaneous – Shareholding, Promoters
| Shareholder Group | Mar ’22 | Mar ’24 | Jun ’25 |
|---|---|---|---|
| Promoters | 52.16% | 52.16% | 52.49% |
| FIIs | 14.85% | 10.68% | 9.33% |
| DIIs | 25.18% | 31.31% | 32.33% |
| Public | 7.68% | 5.81% | 5.79% |
- FIIs are bailing
- DIIs are hoarding
- Public is chilling.
Also:
- AGM approved ₹6.50 dividend
- Borrowing limit hiked to ₹1.5 lakh Cr
- Rights issue deployed as per plan
13. EduInvesting Verdict™
Mahindra Finance is not sexy. But it’s solid, decently valued, and predictable, which is more than we can say about your crypto portfolio. If you like slow compounding, rural exposure, and shareholder-friendly DNA, it’s worth tracking.
Don’t expect multibagger fireworks. Expect EMIs paid on time, a few credit rating upgrades, and maybe—just maybe—a re-rating if they pull a Chola-style tech transformation.
Metadata
– Written by EduInvesting Team | 23 July 2025
– Tags: Mahindra Finance, NBFC, Rural Lending, M&MFIN, Q1 FY26, Auto Finance, EduInvesting
