In Tuesday’s intra-day trades, Mahindra & Mahindra Financial Services shares gained 10% at Rs 197.50 on the BSE on improvement in asset quality, with stage 2/3 assets seeing a consecutive improvement of 170bp/100bp in the September quarter and maintaining a contented liquidity position in three months.

As of September 30 2022 (Q2FY23), the Company imagines its Gross Stage 3 to be around 7% and Gross Stage 2 to be around 10%, M&M said in a pre-quarterly release. In September 2022, aided by macro tailwinds, the business continued its impetus with the disbursement of approximately Rs 4,080 crore transporting a 110% Y-o-Y growth. This decodes to a Y-o-Y growth of 82% in Q2FY23 and 106% for H1FY23.

The first half disbursement is estimated at around Rs 21,300 crore, the Company said.The healthy disbursement trends in the first half led to a strong gross asset book of about Rs 73,900 crore, rising around 3% monthly. This resulted in Y-o-Y growth of ~16 % vs September last year and ~14 % vs March 2022.

Motilal Oswal Financial Services supposes the Company to deliver an RoE of about 11% over the medium term. However, despite today’s rally, the stock price of M&M Financial has altered 16% from its 52-week high level of Rs 235, which hit on September 15 2022, after RBI directed the Company to immediately cease any retrieval or repossession activities via an outsource till further orders.