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Mahindra Finance Shifts Gears: Beyond Vehicle Loans
5 Dec, 2025
Summary
- Nomura upgraded Mahindra & Mahindra Financial Services to 'Buy'.
- Company targets 18-20% annual loan book growth over five years.
- New leadership team aims for higher return on assets and equity.
Mahindra & Mahindra Financial Services (MMFS) experienced a notable share price increase following a 'Buy' rating upgrade from Nomura, which also set a target price of ₹440. The brokerage highlighted MMFS's strategic pivot to diversify its lending portfolio, moving beyond its historical heavy reliance on vehicle financing.
Nomura pointed out that while vehicle loans constituted 93% of MMFS's asset mix in March 2022, the company is now actively scaling up SME and mortgage lending. Management plans to achieve an 18-20% annual growth in its overall loan book over the next five years, aiming for a medium-term return on assets of 2.2-2.5%.
The company's leadership has also undergone a refresh, with a new team bringing enhanced experience. Despite potential risks associated with its rural market exposure and the challenges of shifting its loan composition, MMFS is positioning itself for renewed momentum and improved financial performance, targeting mid-teen returns on equity.
