# M&M Financial Services Shares Crash 10% After Q2 Results

> M&M Financial Services shares drop 10% as Q2 results show rising credit costs and lower margins.
- Title: M&M Financial Services Shares Crash 10% After Q2 Results
- Summary: M&M Financial Services shares drop 10% as Q2 results show rising credit costs and lower margins. M&M Financial Services shares fell 10% after Q2 results…
- Keywords: m&m financial services, q2 results, nomura, motilal oswal, credit costs, net interest margin, share price, financial services, money, business, Financial, Services
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/stocks/news/mm-financial-services-shares-crash-10-after-q2-results-what-are-nomura-and-other-analysts-saying/articleshow/135107851.cms
- Author: Veer Sharma
- Published: 2026-10-22T05:04:00+00:00
- Read time: 1 min
- Topics: m&m financial services, q2 results, nomura, motilal oswal, credit costs, net interest margin, share price, financial services, money, business
## M&M Financial Services Shares Plunge
Shares of Mahindra & Mahindra Financial Services plunged as much as 10% to their day’s low of Rs 368 on the BSE on Thursday.
## Q2 Earnings Report Highlights
The company reported a 55% year-on-year rise in consolidated net profit to Rs 882 crore for Q2 FY27, helped by higher business volumes and lower credit costs.
## Revenue and Asset Growth
Revenue from operations rose 15% to Rs 5,164 crore, with net interest income increasing 17% to Rs 2,822 crore.
## Consolidated Profit and Assets
On a consolidated basis, net profit rose 61% to Rs 911 crore and consolidated total assets grew 21% to Rs 1.80 lakh crore.
## Credit Cost Moderation
Credit cost moderated to 1.6% of average total assets from 2.2% a year earlier, while net interest margin remained unchanged at 7%.
## Management Targets
M&M Finance is targeting a return on assets of 2.2%-2.5% by FY31, compared with 2.2% in the September quarter.
## Analyst Reactions
Nomura lowered its target price on M&M Financial Services to Rs 400 from Rs 415 while retaining its Buy rating, implying an upside of 35%.
## Credit Quality Concerns
The brokerage has turned cautious on asset quality in the tractor financing segment and expects credit costs to rise to 1.8% on an annualised basis in Q3-Q4 FY27.
## Funding Costs Impact
Nomura flagged rising funding costs as a concern and cut net profit estimates for FY27-FY29 by 1-9% while factoring in a 70-basis-point increase in funding costs.
## Key takeaway

M&M Financial Services shares fell 10% after Q2 results revealed higher credit costs and declining net interest margins, with analysts lowering price targets.