Mahindra Group stock gets Nomura upgrade, may rise nearly 20%

Mahindra & Mahindra Financial Services (MMFS) saw its shares rise on Thursday after Nomura upgraded the stock to ‘Buy’ from ‘Hold’ and assigned a target price of ₹440.

The brokerage said the company is

entering an early phase of diversification away from its traditional dependence on vehicle financing. The stock touched an intraday high of ₹367.75, up around 6%.

Nomura noted that MMFS’s asset mix has long been dominated by vehicle loans — 93% in March 2022, moderating only to 88% as of September 2025.

After several years of weak performance, the company has regained momentum, delivering 24% AUM CAGR in FY22–25 driven by growth in passenger vehicles, light commercial vehicles and new segments such as SME and personal loans.

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Management plans to continue diversifying the book by scaling up SME and mortgage lending, while strengthening its position in passenger vehicles, commercial vehicles and tractors. It aims to grow the overall loan book 18–20% annually over the next five years.

Nomura highlighted MMFS’s leadership refresh, with six of eight senior second-line leaders joining post-2023, adding that the new team brings wider experience and capability. Management is targeting a medium-term ROA of 2.2–2.5%, compared with under 2% currently, and aims to lift ROE to mid-teens.

It flagged risks including rural-market exposure and the challenges of shifting away from a vehicle-heavy loan mix.