AUM Growth Target: 16-18% CAGR FY26-31
Total franchise AUM to compound at 16-18% over 5 years, requiring wheels business (core mobility) to grow at ~12% and non-wheels new engines to grow at 30%+.
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Credit Cost Guidance: 1.3-1.7% Band
Management maintains the through-cycle credit cost guidance of 1.3-1.7%, expecting execution to keep FY27 near lower end barring major monsoon/geo-political disruptions.
Non-Wheels AUM Growth: 30%+
New engines of growth (SME lending, personal loans on existing franchise, housing) expected to compound at 30%+ to reach meaningful scale contribution within the 5-year plan.
Capital Raise: No Requirement for 6-8 Quarters
Tier-1 capital at 16.5% (well above regulatory minimum) and debt-equity at 5.8x provide sufficient headroom; management does not anticipate capital raise in near term.
Credit Cost Guidance: 1.7% for FY26
Management reiterated full-year credit cost guidance of 1.7%, citing manageable GS2/GS3 stock and PCR cover of 53%, expecting better execution in H2 despite 2.2% in Q2.
PV Volume Growth: 12% expected in H2
Management expects passenger vehicle industry volume growth of 12% in H2 (vs 4% in H1) due to GST-driven demand, with full-year blended growth of ~8% benefiting Mahindra Finance's 40% PV book.
Tractor Industry Growth: 15% full-year
Tractor industry expected to grow 15% YoY for full year with H2 at 18-20% growth (vs 10% H1), supporting Mahindra Finance's strong tractor franchise.
Disbursement Growth: Targeting 15% medium-term
Management stated intent to reach at least 15% steady-state disbursement growth through current segments (PV, tractor, used vehicles) and accelerate housing finance, up from current lower growth rates.
Medium-term AUM growth target of 16-18%
Management reiterated the parent's stated growth aspiration for the decade (FY21-31) of 16-18% CAGR. Growth levers include 30-40% growth in MSME and mortgage businesses alongside market-rate growth in the wheels business.
ROE target of 15%+
First milestone is 15% ROE, to be achieved through ROA expansion (leveraging NIM improvements, operating leverage, and credit cost staying within 1.3-1.7% band) combined with balance sheet leverage approaching 6x.
NIM steady state at 7.1%
Management does not expect Q4's 7.5% NIM as the new normal; 7.1% is considered reasonable steady state with 20-30 bps possible improvements from structural fee income growth and treasury efficiency.
Credit cost within 1.3-1.7% band
Full year credit cost at 1.7% (higher end of range) reflects proactive provisioning including ₹217 crore macro overlay. Management confident in staying within range despite near-term macro headwinds.