Mahindra Finance share price zooms 10%; what is fuelling buying in Mahindra Group stock?

Mahindra and Mahindra Finance share price on Tuesday, October 4, zoomed over 10 per cent on account of improvement in asset quality during September and Q2 FY23. On the NSE, Mahindra Finance, NSE: M&MFIN, hit day's high of Rs 202, advancing over 11 per cent. According to an exchange filing by the company on Monday, its business aided by macro tailwinds, continued momentum with disbursement of approximately Rs 4,080 crores delivering a 110% Y-o-Y growth. This translates to a Y-o-Y growth of 82% in Q2 FY23 and 106% for H1 FY23. The first half is estimated to clock a disbursement of approximately Rs. 21,300 crores.

Healthy disbursement trends during the first half have led to a strong gross asset book of approximately Rs 73,900 crores, growing ~3% month on month. This has also resulted in Y-o-Y growth of ~16% vs September last year and ~14% vs March 2022.

The collection efficiency (CE) was at 98% for September 2022, against CE of 96% for August 2022. 

The asset quality further improved during the month and the quarter. As on 30th September 2022, the company expects its Gross Stage 3 to be around 7% (compared to 8% as of 30th June 2022) and Gross Stage 2 to be around 10% (compared to 11.7% as of 30th June 2022).

The company said that it continued to enjoy a comfortable liquidity position on its Balance Sheet, with a liquidity chest of over 3 months.

Mahindra Finance share price has delivered a negative return of around 10 per cent in the last one month. The Reserve Bank of India had last month barred the company from engaging a third party for recoveries in cases of loan default. In 2022 so far, it has delivered a stellar return of 28 per cent. Mahindra Finance share price 52-week range is Rs 235.10 - Rs 128.