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M&M Financial Services Shares Soar on Strong Disbursement Growth, Collections

Total disbursements at Mahindra & Mahindra Financial Services rose 39%.

Shares of M&M Financial Services rose 2% on June 2 after the non-bank financial institution reported a 39% year-over-year increase in overall disbursements and strong collection efficiency.

The stock was trading at Rs 298.15 on the BSE at 2:31 pm, up 1.4% from its previous close. The stock is up 18% in the past three months and more than 200% in the past three years.

In May 2023, the financial institution estimates its total disbursement to be around Rs 4,150 crore, a year-on-year increase of 39%, the company said in a business update. Collection efficiency in May 2023 is 96%, compared to 95% a year earlier.

M&M Financial Services continues to maintain comfortable liquidity for about three months’ needs, the company said.

Mahindra & Mahindra Financial Services primarily financed vehicles such as used, utility, tractors, passenger, and commercial vehicles. The company’s focus is on rural and semi-urban areas. It also has businesses in housing, insurance and asset management companies through its subsidiaries.

Shares of M&M Financial Services have come under pressure over the past two to three years due to management’s cautious stance on growth and poor asset quality, ICICI Securities said. However, with the FY25 roadmap in place, encouraging guidance on growth and asset quality, the domestic brokerage believes a return on assets of 2.5% is achievable.

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