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Mahindra & Mahindra Financial Services share price surges on strong business update

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Shares of Mahindra & Mahindra Financial Services surged over five percent on Monday as the company reported a strong business update for August.

Mahindra & Mahindra Financial Services share price surges on strong business update
Shares of Mahindra & Mahindra Financial Services surged over five percent on Monday as the company reported a strong business update for August.
“In August 2021, the business continued its momentum with a disbursement of more than Rs 2,000 crore for the second month in a row,” Mahindra & Mahindra Financial Services said in a regulatory filing.
The total disbursement at around Rs 2,150 crore, was up about 57 percent on-year due to a low base. The collection efficiency further improved to around 97 percent in August from 95 percent in July.
CLSA Asia Pacific Markets said monthly disbursals have also improved and are gradually approaching pre-Covid levels.
The foreign brokerage firm has increased its FY23/24 earnings per share estimates by 4-9%, and also hiked its target price by nearly 17 percent to Rs 210.
Improved asset quality metrics could lead to a multiple rerating, CLSA added.
With opening of the economy and improved mobility, the company witnessed a meaningful reduction in the non-performing asset contracts during the month as customer cash flows improved. Mahindra & Mahindra Financial Services expects this trend to continue in September and the coming months.
At 09:45 IST, shares of Mahindra & Mahindra Financial Services were up 2.4 percent at Rs 169.15. It touched an intraday high of Rs 174.30.
The stock gave a total return of nearly 24 percent in the last one year, thereby sharply underperforming the Sensex returns of 52 percent.