M&M Finance Shares Surge Over 5% Post Positive Q3 Results: Buy, Sell, or Hold?

Mahindra & Mahindra Financial Services, a non-banking finance company, has reported a 12% decline in standalone net profit to ₹553 crore for the December quarter of FY24, compared to ₹629 crore in the same period last year. Despite the profit dip, M&M Finance’s shares witnessed a notable jump of over 5% following the upbeat Q3 results.

In Q3FY24, the company’s net interest income (NII) rose by 10% to ₹1,815 crore from ₹1,650 crore YoY, with an 8% growth on a quarterly basis. The net interest margin (NIM) stood at 6.8%, a slight decline from 7.4% YoY but an improvement from 6.5% sequentially.

Quarterly disbursements increased by 7% YoY to ₹15,436 crore, and the collection efficiency for the quarter stood at 95%. M&M Finance also reported an improvement in asset quality, with stage 3 assets at 4.0%, down from 4.3% in September 2023 and 5.9% in December 2022.

Several brokerages have reacted positively to M&M Finance’s Q3 results, with some raising their target prices on the stock. Nuvama Institutional Equities upgraded the stock to ‘Hold’ from ‘Reduce,’ revising EPS estimates and raising the target price to ₹280 per share. JM Financial maintained a ‘Buy’ call, raising the target price to ₹345 per share. Centrum Broking maintained an ‘Add’ rating, increasing the target price to ₹306 per share, while Emkay Global Financial Services reiterated a ‘Reduce’ rating but raised the target price to ₹280 per share.

M&M Finance’s shares have shown resilience, gaining over 18% in the past three months and more than 24% in the last year. As of 10:20 am, M&M Finance share price was trading at ₹290.15 apiece on the BSE, reflecting a 3.64% increase.

Investors are now left to decide whether to buy, sell, or hold M&M Finance shares based on their assessment of the company’s Q3 performance and the recommendations from various brokerages.