M&M Financial shares tank after NBFC's NIM shrinks to a 9-quarter low in Q2

M&M Financial share price NSE, M&M Financial Q2 results, M&M Financial share price target: Mahindra and Mahindra Financial Services Limited (M&MFIN) shares plunged on Monday, October 30, after the non-banking financial company (NBFC) reported a weak set of financial results for the July-September period. The stock of M&M Financial Services slumped as much as 14.4 per cent to Rs 237.35 apiece on NSE.  

The company's net interest margin (NIM), a key measure of profitability for financial institutions, shrank to 6.5 per cent for the September quarter, the lowest in nine quarters, according to a regulatory filing. The margin was impacted by higher borrowing rates coupled with a change in the portfolio mix in favour of better credit quality customers.  

After market hours on Friday, the company reported a 47.5 per cent year-on-year fall in net profit to Rs Rs 235 crore even as its net interest income (NII) increased 9.6 per cent to Rs 1,674 crore for the fiscal second quarter, according to the filing. NII is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors.  

The NBFC’s revenue from operations grew 24.2 per cent to Rs 3,211.9 crore. 

M&M Financial share price target: Here's what the brokerages make of the NBFC’s Q2 earnings: 

Mahindra & Mahindra Financial share price history 

Mahindra & Mahindra Financial's stock has given a positive return of over 20 per cent in the last 12 months (from October 21, 2022) as per Trendlyne data. In comparison, the headline index Nifty 50 has rallied over 6 per cent.

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