Multiple brokerages have issued bullish recommendations on Mahindra Finance with target prices ranging from ₹370 to ₹375. Emkay Global Financial has issued a buy rating on Mahindra Finance with a target price of ₹370 in its research report dated October 22, 2026, while Motilal Oswal has also recommended a buy rating with a target price of ₹375 in its report dated October 21, 2026. According to Emkay Global, the brokerage maintains its positive outlook despite cutting its September 2027 target price by approximately 10% from ₹410 to ₹370, implying a FY28E price-to-book value of 1.7x. Meanwhile, ICICI Securities has also issued a buy rating on Mahindra and Mahindra Financial Services with an unchanged target price of ₹415, valuing the stock at 2x Sep'27E BV. Both brokerages maintain their bullish stance on the stock despite different target prices.
The company reported a healthy 2QFY27 performance with profit after tax (PAT) rising 55% year-on-year to ₹8.82 billion, representing a ~7% beat over estimates. As reported by Emkay Global, assets under management (AUM) grew approximately 15% year-on-year to ₹1.47 trillion, aided by strong momentum in the non-wheels segment. According to Motilal Oswal's latest report, NII grew 13% YoY to ₹23.9 billion (in line with estimates), while other income rose 42% YoY to ₹4.4 billion (14% above estimates), driven by higher fee and dividend income. The performance was supported by broad-based disbursement growth, benign asset quality, and contained credit cost, with core profitability remaining robust despite macroeconomic headwinds.
According to the research reports, gross stage 2+3 (GS2+GS3) assets fell to a multiyear low of 8.1%, with the usual seasonal deterioration in Q2 largely absent. Management sees existing overlays of ₹8.52 billion as an adequate cushion against external stress and currently sees no need to build more provisions. The company demonstrated sustained improvement across business parameters, including growth, margins and asset quality, validating the successful adoption of its revamped tech-led business model. Motilal Oswal reports that credit costs stood at ₹6.3 billion (in line with estimates and 2% lower than estimates), with annualized credit costs at 1.8% compared to 2.4% in the previous year. However, the reports note that margins remain at the lower end of the level needed for target ROA.
Emkay Global highlighted several near-term headwinds facing the company, including rising cost of funds amid rate hikes, draft insurance-commission norms that could dent fee income, drought-related collection risk, and softer early festive demand, particularly in tractors. The report notes that the drag from excess liquidity and trade advances should ease going forward. Despite these challenges, core profitability remains robust with strong RoA at 2.2%. Motilal Oswal notes that the company targets medium- to long-term AUM growth of 16-18%, with core vehicle lending expected to outpace industry growth marginally and diversification across mortgages, SME lending and leasing driving incremental growth. The brokerage estimates AUM/PAT CAGR of ~14%/18% over FY26-28 and RoA/RoE of 2.2%/13.5% in FY28.
According to the research, management retained its medium-term guidance on growth, credit cost, and ROA, and stated that the MRHFL merger is on track. Taking cognizance of the steady progress toward its medium-term RoA target of 2.5% and consistently improving earnings trajectory, ICICI Securities maintains BUY with an unchanged TP of ₹415. Motilal Oswal reiterates its BUY rating with a target price of ₹375 based on 1.6x Sep'28E BV. Despite cutting FY27-29 estimates due to near-term challenges, Emkay Global maintains its buy recommendation while adjusting its target price downward. Both brokerages expect the company to navigate current headwinds while maintaining its growth trajectory, with Motilal Oswal modeling AUM CAGR of ~14% over FY26-28E.
