M&M Financial Services gains on strong disbursement growth, collections

Shares of M&M Financial Services rose 2 percent on June 2 after the non-banking financier reported a 39 percent YoY growth in overall disbursement along with strong collection efficiency.

At 2.31 pm, the stock was at trading Rs 298.15 on the BSE, up 1.4 percent from the previous close. The stock has gained 18 percent in the past three months and over 200 percent in the past three years.

In May 2023, the financier estimated its overall disbursement at approximately Rs 4,150 crore, delivering a YoY growth of 39 percent, the company said in a business update. The collection efficiency was at 96 percent for May 2023 against 95 percent in the year-ago period.

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M&M Financial Services continued to maintain comfortable liquidity chest of about three-month requirement, the company said.

Mahindra & Mahindra Financial Services is primarily into a vehicle financing business such as pre-owned auto, utility vehicles, tractors, passenger cars and commercial vehicles. The company’s focus is on rural and semi-urban areas. It also has a presence in housing, insurance and AMC through its subsidiaries.

M&M Financial Services share price was under pressure for the past two to three years due to management’s cautious approach to growth, weak asset quality, ICICI Securities said. However, with the roadmap for FY25 in place, encouraging guidance on growth and asset quality, the domestic brokerage firm believes that a Return on Asset of 2.5 percent is achievable.

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