Mahindra & Mahindra Financial Services shares surged with high volumes on Tuesday after the company said it estimates its disbursements to jump 82 percent in the July-September period compared with the corresponding quarter a year ago. Macroeconomic tailwinds aided the Mumbai-based financier's business momentum.
M&M Financial shares jumped by as much as Rs 22.3 or 12.4 percent to Rs 201.9 apiece on BSE. As many as 9.3 lakh shares changed hands on BSE in the first half of the day as against a daily average of 5.3 lakh in the past two weeks, according to exchange data.
The non-banking financial company has pegged disbursements at Rs 4,080 crore in the July-September period, according to a quarterly business update.
In the six-month period ended September, the company estimates a jump of 106 percent in disbursements to about Rs 21,300 crore, leading to a 16 percent rise in its gross asset book of Rs 73,900 crore.
M&M Financial expects improvement in its asset quality in the quarter ended September.
Morgan Stanley said the financier's estimates estimate for quarterly disbursements, assets under management as well as asset quality wereahead of estimates.
M&M Financial Services said it continues to enjoy a comfortable liquidity position on its balance sheet, with a liquidity chest of over three months.
Bank of America Securities maintained a 'buy' rating on the M&M Financial stock after the company's business update, with a target price that implies a 36.5 percent upside from Monday's closing price.
Tuesday's jump brings some respite to investors as the RBI's move last month to restrict the company from conducting its recovery or repossession operations through outsourcing arrangements led to selling pressure in the stock.
The regulatory action was based on certain material supervisory concerns observed in the company with regard to the management of its outsourcing activities. The RBI, however, allowed M&M Financial to continue such operations through its employees.
M&M Financial Services shares have lost more than seven percent of their value in the past one month, a period in which the Nifty50 benchmark has declined 1.7 percent.
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