Mahindra & Mahindra Financial Services (M&M Finance) stock jumped in Monday’s trade after announcing the third quarter, which ended December 2022 (Q3 2022-2023), results. The shares hit a day high — also a 52-week high — of Rs 267.30, surging 10 per cent over a previous close of Rs 243.
“In Q3 FY23, M&M Finance delivered a profit after tax of Rs 630 crore (down 30 per cent YoY/ up 40 per cent QoQ), beating our street high estimates of Rs 580 crore, led by healthy AUM (Assets Under Management) growth, steady NIMs (Net Interest Margin) and moderation in credit costs. Sequentially, operational performance was strong, driven by a recovery in net interest income (7 per cent QoQ) and partly aided by soft base,” JM Financial Institutional Securities stated in its report.
The brokerage has assigned a ‘Buy’ call on the counter with a target price of Rs 310.
On the technical front, an analyst suggested that Mahindra Finance showed inherent strength, while another analyst advised booking profits at current levels.
Osho Krishan, Senior Analyst- Technical and Derivative Research at Angel One, said, “Mahindra Finance surged after the announcement of its quarterly earnings and has made a new 52-week high. The stocks witnessed a runaway gap on the daily chart at the start of the week, indicating inherent strength in the counter. On the daily chart, the stock is placed well above all its EMAs (Exponential Moving Averages), which adds to the bullish quotient. As far as levels are concerned, Rs 245-250 is expected to provide a cushion from any blip, followed by the sacrosanct support of its consolidation zone of the Rs 230-odd zone.”
On the higher end, the intermediate resistance is placed around Rs 275-280, while any authoritative breach could only trigger the next round of rally in the counter, Krishan added.
AR Ramachandran from Tips2trades said, “Mahindra Finance stock price is bullish but overbought on the daily charts currently with strong resistance at Rs 264. Investors should book profits at current levels and wait for a dip near Rs 229-236 to buy for targets of Rs 293 in the coming weeks.”
The stock was last seen trading higher than 5-day, 20-, 50-, 100- and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 75.55. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 15.79.
Mahindra Finance has an average target price of Rs 392.50, Trendlyne data showed, suggesting a potential upside of 48.37 per cent. The scrip has a one-year beta of 1.28, indicating high volatility.
Around 5.30 lakh shares changed hands today on BSE, which was more than three times higher compared to Mahindra Finance’s two-week average volume of 1.36 lakh shares. Turnover on the counter stood at Rs 14.11 crore, commanding a market capitalisation (m-cap) of Rs 32,617.99 crore.
Also, M&M’s finance arm’s total disbursement came at Rs 4,000 crore in January this year, delivering 58 per cent growth over January 2022. The loan book grew by 1 per cent over December 2022, Mahindra Finance said.
The collection efficiency was at 95 per cent for January 2023 compared to 96 per cent achieved in January 2022, it added.
Meanwhile, Indian equity benchmarks fell sharply in afternoon deals today, dragged by metals, technology and financials.
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