Mahindra Finance stock zooms 7% on strong Q4 performance

Shares of Mahindra & Mahindra Financial Services Ltd (Mahindra Finance) surged 7% to a 52-week high at ₹278 after the company's strong performance in the January-March quarter of 2022-23.

The stock opened a gap-up at ₹264.85, against the previous session close of ₹258.95, and rose to the intra-day high of ₹277.95. The stock later traded at ₹266.90, up 3.07% or 7.95 points, as of the filing of the report.

At the current share price, Mahindra Finance's market cap stands at ₹32,994.83 crore. The share touched a 52-week low on May 26, 2022, at ₹160.60.

In its quarterly update on Jan-March standalone and consolidated results, Mahindra Finance said its profit after tax was recorded at ₹684 crore for the quarter, a growth of 14% YoY, while the full FY23 PAT grew 101% at ₹1,984 crore vs ₹989 crore in FY22.

Mahindra Finance's disbursement at ₹13,778 crore was up 50% on a YoY basis in Q4, and consequently, the loan book increased by 27% to ₹82,770 crores on a YoY basis.

Total income for the quarter was at ₹3,057 crore, up 24% YoY, while the net interest margin was at 7.4%. The company's net interest income (NII) for the quarter stood at ₹1,723 crore, up 13% YoY.

As of March end, the company carried a total liquidity buffer of approximately ₹10,400 crore -- covering more than 3 months’ obligations.

Mahindra Finance's annual disbursement was recorded at ₹49,541 crore, a growth of 80%, while the total income grew by 14% to ₹11,056 crore vs ₹9,719 crore last year.

On a consolidated basis, Mahindra Finance's Q4 profit was ₹675 crore, up 7% compared to ₹629 crore for the corresponding quarter last year.

Mahindra Finance's FY2023 profit surged 80% to ₹2,071 crore as compared to ₹1,150 crore during the year-ago period.

YES Securities has retained a 'buy' rating on the Mahindra Finance stock, with a target price of ₹315. Motilal Oswal has also retained a 'buy' rating on the stock, with a target price of ₹320, given its long lineage, strong parentage, and a great liability franchise. Prabhudas Lilladhar, however, has put a 'hold' rating on the stock, with a target price of ₹280.

Among its subsidiaries, Mahindra Rural Housing Finance Limited's (MRHFL) income increased by 7% to ₹355 crore YoY for the quarter. The company's loss was at ₹26 crore YoY. Its FY23 income declined by 2% to ₹1,350 crore and the profit at ₹22 crore declined 54% YoY over last year.

Mahindra Insurance Brokers Limited's (MIBL) income and profit for the quarter stood at Rs 121 crore, up 6% YoY, and ₹121 crore, up 38% YoY, respectively. For the whole year, the income and profit were 23% and 34% to ₹427 crore and ₹52 crore, respectively.

Mahindra Finance USA (MFUSA) reported a Q4 profit of USD 3.7 million, up 9% YoY, while the whole year's profit was at USD 15 million, down 14%. Its income was USD 18 million, down 29% YoY, in Q4 and USD 64.8 million, up 13%, in the full fiscal year.