1Q27: Strong quarter with healthy AQ; targets 16-18% AUM CAGR

Research evidence excerpt

1Q27: Strong quarter with healthy AQ; targets 16-18% AUM CAGR

iQprofile SM Mahindra Finance

Key Income Statement Data (Mar) 2025A 2026A 2027E 2028E 2029E Company Sector

(Rs Millions) Financial Services-Consumer/Commercial

Net Interest Income 74,331 88,196 99,591 111,334 127,009

Net Fee Income 4,128 7,145 9,088 10,676 12,593

Securities Gains / (Losses) 80.40 273.30 69.91 73.40 78.95 Company Description Other Income 2,247 4,069 4,708 4,950 5,219

Total Non-Interest Income 6,454 11,487 13,865 15,699 17,891 MMFS is amongst India's leading non-bank vehicle

Total Operating Income 80,786 99,684 113,456 127,033 144,900 financing providers, with a presence in multiple vehicle

Operating Expenses (33,134) (37,372) (41,807) (46,873) (53,553) financing segments in semi-urban and rural areas of the

Pre-Provision Profit 47,651 62,312 71,649 80,160 91,347 country. MMFS should be a prime beneficiary of strong

Provisions Expense (16,179) (24,412) (25,992) (28,901) (32,131)

rural growth prospects over the longer term. We believe its

Operating Profit 31,473 37,900 45,657 51,259 59,216

Non-Operating Income NA NA NA NA NA relative product diversification within the vehicle financing

Pre-Tax Income 31,473 37,900 45,657 51,259 59,216 segment also allows it to benefit from multiple growth

Net Income to Comm S/Hold. 23,450 28,996 34,243 38,444 44,412 drivers in India such as infrastructure creation and rural

Adjusted Net Income (Operating) 23,450 27,822 34,243 38,444 44,412 growth.

Key Balance Sheet Data

Total Assets 1,355,482 1,479,053 1,675,320 1,897,771 2,167,936

Average Interest Earning Assets 1,230,415 1,394,636 1,554,149 1,764,035 2,011,010 Investment Rationale

Weighted Risk Assets 1,169,678 1,291,073 1,471,795 1,682,658 1,939,723 Our Neutral on MMFS is premised on (i) weak trends in AQ