Limited further NIM upside from cost of funds
Cost of funds improved 30bps in Q2 aided by favorable rate environment and lower leverage post-rights issue. As disbursements grow and capital gets deployed, incremental NIM benefit will be limited.
MAHINDRAANDMAHINDRAFINAN / Q2-FY26 / risks
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Mahindra and Mahindra · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
CV segment lacks recovery momentum
Unlike PV and tractor, commercial vehicle segment has not shown the same festive-season pickup. Management explicitly stated they 'don't share the same enthusiasm' for CV recovery.
ECL model reset in Q3 may impact credit cost
Annual ECL model refresh in Q3 will recalibrate LGD assumptions based on 42-month performance of March 2022 cohort. Analyst raised concern that higher GS3 stock could result in elevated credit cost—management deflected by saying they won't speculate on outcomes.
Used vehicle price correction from GST-driven new car discounts
Price cuts on new vehicles following GST reductions could compress used vehicle valuations, impacting collateral values and potentially increasing loss severities on the 18% used vehicle book.