On April 5, M&M Financial Services shares rallied 3% in early trade amid a surge in disbursements and collections for the March quarter.

M&M Financial Services reported in the Q4FY23 business update document that the disbursements grew by 50% YoY to Rs 13,750 crore, while the FY23 disbursements jumped 80% YoY to around Rs 49,500 crore.

The non-banking finance company reported the FY23 healthy disbursement trends led to business assets at Rs 82,300 crore, rising 7% over December 2022 and 27% over March 2022.

Its collection efficiency as amount percentage demanded in loan repayment was 105% for March 2023, and it was 99% during the January-March quarter as against 100% a year ago.

Stage-3, expected at 4.6% (5.9% in December 2022), and Stage-2, predicted at 6.7% (8.4% in December 2022), have improved. Compared to Stage-3 assets, gross non-performing assets (GNPA) are projected higher by Rs 1,200 crore, needing no additional provisions over and above the credit loss provision for FY2023.

Brokerage firm Sharekhan gave a ‘buy’ rating on M&M Financial Services with a target price of Rs 290, a 25% upside besides the current Rs 238.

M&M stated healthy disbursement numbers for February 2023, up 53% YoY per 5% MoM at Rs 4,185 crore, driven by solid credit demand trends. In an earlier report by Prabhudas Lilladher, NBFC plunged the target price to Rs 260 with a stock’s ‘hold’ rating.