M&M Financial shares slip 2% post-monthly business update—here's what brokerages suggest

M&M Financial share price NSE, M&M Financial share price target: Mahindra & Mahindra Financial Services shares on Tuesday, December 5, declined nearly three per cent to touch the day's low of Rs 269.5 on the BSE, a day after the NBFC posted its monthly business update post-market hours on Monday. The stock ended 2.7 per cent lower at Rs 270.2 on BSE.

The company estimated the overall disbursement at approximately Rs 5,300 crore, delivering a 16 per cent growth over the previous year, in November 2023. The YTD November 2023 disbursements of about Rs 36,000 crore registered a growth of 16 per cent YoY, the company's regulatory filing read.

Here are other highlights from the update:

• Healthy disbursement trends in the current period have led to business assets at around Rs 96,600 crore, a growth of about 17 per cent over March 2023 and approximately 26 per cent over November 2022.
• The collection efficiency (CE) was at 94 per cent for November 2023 (in November 2022, CE was 96 per cent).
• Stage-3 and Stage-2 assets continued to remain rangebound compared to September 2023.
• The company continued to enjoy a comfortable liquidity position on its balance sheet, with a liquidity chest of over 2.5 months.

M&M Financial share price target: Here's what brokerages suggest

BoFA Securities has retained a neutral stance on M&M Financial Services with a target of Rs 327. The global brokerage remains a firm believer in the company’s transformation journey; however, it sees scope for near-term disappointment on the NIM contraction and elevated opex, with 2.5 per cent return on assets (ROA) target visibility rising only in FY25.

Morgan Stanley has continued with its equal-weight rating with a target of 285 rupees. "We have assumed higher growth in 2HF24, so if disbursement growth does not pick up, there could be risks to our AUM forecast," Morgan Stanley said in its report.

Citi has maintained a buy call on the NBFC with a target of Rs 350. The brokerage said that moderation in month-on-month growth of business assets (lowest since December ’22) is likely due to the unwind of trade advances. On the other hand, Jefferies has maintained its hold rating with a target of Rs 295.

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