Sharekhan's research report on Mahindra and Mahindra Financial Services
We believe strong disbursements volumes reported by the company in May 2022 is indicative of healthy demand for M&M Financial Services and other vehicle financiers as well. Further, management has recently unveiled its Vision 2025, which is expected to give it a fillip to deliver on earnings performance going ahead. M&M Financial Services reported strong disbursements growth in May 2022 with disbursements of Rs. 2,973 crore, an increase of 272% y-o-y, on a lower base, which was impacted by the second Covid wave.Month-on-month disbursements grew by 8%. In FY2023 till date, disbursements stood at Rs. Rs. 5,686 crore,up 169% y-o-y. Collection efficiency was at 95% in May 2022 versus 67% in May 2021. The company has demonstrated stable asset quality through cycles. With collection efficiency at pre Covid levels in May 2022, it expects lower volatility in stage 3 assets in Q1FY2023. It continues to hold adequate liquidity buffer of Rs. 8,775 crore as of May 2022, which covers approximately three months of liquidity.
The stock price has corrected by 17% from the highs of Rs. 206 and is available at 1.2x/1.1x its FY2023E/FY2024E BVPS. We re-iterate our Buy rating with an unchanged PT of Rs. 220.
At 12:11 hrs Mahindra & Mahindra Financial Services was quoting at Rs 175.95, up Rs 3.65, or 2.12 percent.
It has touched an intraday high of Rs 176.00 and an intraday low of Rs 172.65.
It was trading with volumes of 59,705 shares, compared to its thirty day average of 196,115 shares, a decrease of -69.56 percent.
In the previous trading session, the share closed down 0.26 percent or Rs 0.45 at Rs 172.30.
The share touched its 52-week high Rs 206.40 and 52-week low Rs 127.95 on 09 November, 2021 and 07 March, 2022, respectively.
Currently, it is trading 14.75 percent below its 52-week high and 37.51 percent above its 52-week low.
Market capitalisation stands at Rs 21,739.63 crore.
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