Mahindra & Mahindra Financial Services has reached a new milestone as its stock price hits a 52-week high, propelling the company’s market capitalization to surpass ₹41,000 crore. With a remarkable gain of 90 percent over the past year, the stock has garnered significant investor attention due to its robust growth prospects and strong disbursement figures. Mahindra & Mahindra Financial Services has consistently demonstrated solid performance throughout the last twelve months.
During Friday’s (June 30) intraday trading on the BSE, the share price of Mahindra & Mahindra Financial Services surged nearly 5 percent, reaching a fresh 52-week high of ₹342.35. This surge propelled the company’s market capitalization to exceed ₹41,000 crore. The stock has showcased remarkable growth over the past year, outperforming the equity benchmark Sensex, which has achieved a gain of 22 percent within the same period. Moreover, the stock has shown positive momentum since April.
Investors have shown bullish sentiment towards Mahindra & Mahindra Financial Services, driven by the company’s promising growth prospects. A recent report by Mint highlighted that the company’s disbursements in May grew by almost 40 percent year-on-year (YoY) and 10 percent sequentially, amounting to ₹4,150 crore. Healthy loan disbursal and stable collections contributed to a 3.3 percent rise in the company’s assets under management, reaching ₹85,500 crore since March. To enhance its business portfolio, Mahindra & Mahindra Financial Services has diversified its loan segments, including SME financing, personal loans, and pre-owned vehicles, which typically yield higher returns. However, analysts caution that the rising cost of funds may exert pressure on the net interest margin (NIM) in FY24. In FY23, the NIM stood at 7.6 percent. Under its mission 2025 plan, Mahindra Finance aims to maintain its NIM at a 7.5 percent level.
The strong performance exhibited by Mahindra & Mahindra Financial Services during the March quarter (Q4FY23) has further boosted the stock price. The company’s assets under management (AUM) recorded a significant 27 percent YoY growth, propelled by a 50 percent YoY increase in loan disbursements across all segments and stable collections. Although the net interest margin (NIM) remained steady at 7.4 percent in Q4FY23, analysts anticipate a contraction in the upcoming period due to higher funding costs.
The impressive ascent of Mahindra & Mahindra Financial Services reflects the market’s confidence in its growth trajectory and operational performance. With its continued focus on diversification and expansion into lucrative loan segments, the company is well-positioned to navigate challenges and capitalize on emerging opportunities in the financial services industry.
