Why did Mahindra Finance shares touch new 52-week high?
Premium- In November month, Mahindra Finance continued its momentum with the disbursement of approximately ₹4,500 crore -- recording a growth of a whopping 75% yoy. Year-to-date, the company's disbursement is around ₹31,050 crore rising by a massive 99% yoy.
Mahindra Group's financial services provider, Mahindra Finance on Monday touched a new 52-week high on exchanges after its monthly performance data. Against the backdrop of a positive macro environment, Mahindra Finance continued its strong momentum in disbursements in November month. Investors cheered Mahindra Finance stock to the point it rose by more than 6% so far in the day. Currently, the stock traded near its fresh 1-year high.
At around 1.48 pm, Mahindra Finance shares traded at ₹241.65 apiece up by 5.5% on BSE. The stock has touched a new 52-week high of ₹243.60 apiece.
At the current market price, the company's market cap is nearly ₹29,869 crore.
Due to the current bull run, Mahindra Finance shares have skyrocketed by at least 60% year-to-date. While in a year, the shares have zoomed more than 52% on Dalal Street. The shares were around ₹160 levels on December 6 last year.
In November month, Mahindra Finance continued its momentum with the disbursement of approximately ₹4,500 crore -- recording a growth of a whopping 75% yoy. Year-to-date, the company's disbursement is around ₹31,050 crore rising by a massive 99% yoy. The performance came amidst the backdrop of a positive macro environment.
Further, healthy disbursement trends led to a robust gross asset book to the tune of ₹76,300 crore in November --- growing 3.4% over September 2022. This has resulted in a growth of 17.5% versus March 2022.
Also, the collection efficiency (CE) was at 96% for November 2022, against CE of 94% in the same month last year.
By end of November month, the company's stage 2 assets garnered a sequential reduction compared to October 2022 and is estimated below 9%, While Stage 3 assets remained stable at lower than 7% as at month end.
Mahindra Finance expects further improvement in Stage 2 and Stage 3 assets during December 2022.
In its regulatory filing, Mahindra Finance highlighted that gross non-performing assets (GNPA) (as per Income Recognition, Asset Classification, and Provisioning norms) is estimated to be higher than Stage 3 asset by ~ ₹1200 crore, reconfirming the management beliefs that no additional provisions may be required over and above the Expected Credit Loss (ECL) provision for FY23.
Lastly, Mahindra Finance continued to enjoy a comfortable liquidity position on its Balance Sheet, with a liquidity chest of over 4 months.
During Q2FY23, Mahindra Finance's standalone net profit dropped by 56.17% to ₹448.33 crore as against ₹1,022.90 crore in the same quarter last year. However, Q2 PAT skyrocketed by 101.11% from a profit of ₹222.92 crore in the June 2022 quarter. Meanwhile, in Q2FY23, its net interest income stood at ₹1,540 crore up by 2% yoy with a healthy net margin of 7.5%. The company's loan book increased by 9% to ₹73,817 crore compared to Q1FY23 aided by an increase in disbursements. Disbursement for the quarter at ₹11,824 crore was up 83% on yoy basis.
