On October 4th, the company's shares jumped 10 percent after it reported disbursements of over Rs 4,000 cr in September. In the second quarter and first half of FY23, the company grew at an on-year rate of over 100 percent.
The scrip was quoting at Rs 199 per share on the stock exchange. It was one of the top gainers.
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The gross asset book has grown by 3 percent month-on-month due to healthy disbursement trends.
The collection efficiency was at 98 percent in September. The asset quality continued to improve during the month. The company expects its Gross Stage 3 to be around 7 percent as of September 30, compared to 8 percent as of June 30.
The Morgan Stanley estimates were ahead of all of them. The target price for the stock is Rs225 per share. Collections and disbursements continued to be strong in September. The asset quality was better than expected.
There is a ban on the lender from hiring third-party entities for the purpose of recovering loan assets. The unfortunate incident happened when recovery agents were repossessing a tractor that was financed by the company.
The Hazaribagh incident raises questions about whether Mahindra Finance followed the instructions of the Reserve Bank of India.
The stock has tumbled 9 percent in the past month. Analysts believe there will be significant increase in stress in the coming quarters. “On an annualised basis, 36-48k contracts could see delayed repossession due to the ban. A 5 percent higher loan loss on these assets could impact credit costs by 10-15 bps (annualised) per our back-of-the-envelope calculations,” Jefferies said.
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