Mahindra Finance Q2 Results October 21, 2026: Profit Up 55% to ₹882 Crore as Credit Cost Eases

Mahindra Finance Q2 results landed after market hours on October 21, 2026, and the headline is hard to miss: standalone profit after tax rose 55% year-on-year to ₹882 crore, from ₹569 crore in the September 2025 quarter, according to the company’s press release filed with BSE and NSE. The board meeting wrapped up at 5:35 pm, so the stock gets its first chance to react on Thursday.

What makes this quarter interesting is not just the profit jump. It’s where the jump came from. Loan growth was decent, but the real lift came from lower credit costs, which is the line that has troubled vehicle financiers for years.

Mahindra Finance Q2 results: the key numbers

Here is the standalone picture for the quarter ended September 30, 2026, from the press release and the investor presentation:

• Disbursements: ₹16,499 crore, up 22% from ₹13,514 crore a year ago.
• Business AUM: ₹1,46,512 crore, up 15% from ₹1,27,246 crore.
• Net interest income: ₹2,822 crore (revenue from operations of ₹5,164 crore minus finance cost of ₹2,341 crore), up 17% from ₹2,406 crore.
• Pre-provisioning operating profit: ₹1,791 crore, up 20% from ₹1,499 crore.
• Provisions and write-offs: ₹630 crore, down 16% from ₹751 crore.
• Net interest margin: 7.0% of average total assets, flat on the year.
• Return on assets: 2.2%, against 1.6% a year earlier.

On a consolidated basis, profit rose 61% to ₹911 crore from ₹566 crore, total income rose 18% to ₹5,962 crore and total assets grew 21% to ₹1,80,292 crore.

Credit cost did the heavy lifting

Credit cost, measured as a share of average total assets, eased to 1.6% from 2.2% in the same quarter last year. Put that next to the rest of the table and the story is clear. Operating profit grew 20%, but profit after tax grew 55%, because provisions shrank while the business grew.

Asset quality backs this up. Gross Stage 3 assets (loans in default) fell to 3.4% from 3.9%, and Stage 2 assets (loans showing early stress) fell to 4.7% from 5.8%. Collection efficiency improved to 97% from 96%. The company says provision coverage on Stage 3 assets stood at 56.6%, capital adequacy at 18.0% with Tier-1 capital at 16.2%, and its liquidity buffer at more than ₹16,150 crore.

One small caution we’d flag: on a sequential basis, profit actually dipped about 2% from ₹899 crore in the June quarter, as provisions rose to ₹630 crore from ₹570 crore. The year-on-year jump is real, but the quarter-on-quarter trend is flatter.

Where the loans went

Passenger vehicles are still the biggest piece. PV disbursements rose 28% to ₹6,826 crore, pre-owned vehicle loans grew 15% to ₹2,834 crore, commercial vehicle and construction equipment loans rose 16% to ₹2,657 crore, and tractor loans grew 13% to ₹1,979 crore. The faster growth sat outside vehicles: non-vehicle disbursements, covering SME, personal loans, housing and others, grew 52% year-on-year.

Speaking on the analyst call, MD and CEO Raul Rebello said the company is aiming for a return on assets of 2.2% to 2.5% by FY31, The Economic Times reported. He also said non-vehicle loans now make up 20% of consolidated lending AUM.

What it means for investors

Mahindra Finance describes itself as a vehicle and tractor financier with a strong focus on rural and semi-urban markets, so collections there drive the numbers. A lower credit cost with a flat 7% margin suggests the profit growth isn’t coming from riskier pricing. The open question is whether that 1.6% credit cost holds as the non-vehicle book, which is newer and less seasoned, keeps growing at 50%-plus.

If you want a framework for reading lender results like this one, our guide on how to analyse quarterly results walks through the main lines. For comparison, see how another big NBFC fared in Bajaj Finance’s Q2 results and Piramal Finance’s Q2 numbers.

Disclaimer: This article is for information and education only and is not investment advice. Please do your own research or speak to a SEBI-registered adviser before making investment decisions.