Mahindra Finance shares zoom over 11% on strong asset growth

Shares of Mahindra and Mahindra Financial Services on Tuesday surged more than 11 per cent after the company said its business momentum continued last month with disbursement of around Rs 4,080 crore, delivering a 110 per cent year-on-year (YoY) growth.

The company's stock zoomed 11.36 per cent to trade at Rs 199.95 in afternoon deals. During the day, it touched an intraday high of Rs 201.85 on the BSE index.

Taking intraday high price into consideration, Mahindra Finance traded a little over 11 per cent lower from its 52-week high and around 58 per cent higher from its one-year low.

In an exchange filing, the company said the disbursement figure translated into a YoY growth of 82 per cent in Q2 FY23 (2022-23) and 106 per cent for first half in FY23.

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Healthy disbursement trends during the first half have led to a strong gross asset book of approximately Rs 73,900 crore, it added.

In addition, Mahindra & Mahindra's financial arm said its collection efficiency (CE) came at 98 per cent for September 2022, against CE of 96 per cent recorded in the earlier month. In terms of balance sheet, the company said it continued to enjoy a comfortable liquidity position, with a chest of over three months.

Further, Mahindra Finance said its asset quality improved during September and the quarter.

Last month, the stock came under immense pressure after the Reserve Bank of India (RBI) directed the company to stop using third-party services for loan recovery.

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Mahindra Finance responded that the halt on vehicle recovery by third-party agencies would not "any material impact" on its financials.

Meanwhile, Indian equity benchmarks rebounded sharply today, led by gains across all sectors.