Nomura has reiterated its ‘Reduce’ rating on M&M Finance, keeping the target price to ₹230, citing sluggish growth and sustained credit cost pressures.
The company reported a 9% YoY drop in net profit to ₹563.1 crore in Q4FY25, despite a 12.1% YoY rise in NII to ₹2,151.2 crore. However, disbursal growth was soft, up 1.6% YoY and down 5.7% QoQ. GNPA stood at 2.28%, marginally improving from 2.31% in Q3, while provisions rose 26.6% QoQ.
Nomura highlighted that credit cost rose to 1.6%, driven by elevated write-offs at 1.7% in Q4, and expects these to remain high at 1.8–1.9% over FY26–28F. Management has guided for medium-term credit costs of 1.3–1.7%, but Nomura remains conservative in its assumptions, citing MMFS’s historical asset quality challenges.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.
