On may 18, Mahindra & Mahindra Financial Services share price is now recorded as 18% as company reported a hit on March quarter profit due to high provisions.The stock closed at Rs 137.75, recorded low as Rs 30.65 or 18.20 percent on the bombay stock exchange and overall in last two months the stock broadly in a satisfied trends.Given the extended lock down and difficulty for companies to function, analysts expect weak growth in financial year 2020-2021, though recovery could be possible from second half of 2020-2021. Therefore some will have buy rating and some others have hold call on the stock.
“MMFS’ business and asset quality performance, and company regular earnings were hit by lock down, despite Q4 being a seasonally strong quarter. Operating performance is likely to be subdued in the near term. Elevated provisions are likely to persist, weighing down on earnings,”
HDFC Securities said in terms of asset quality, Quarterly-4 Financial Year 20 performance was a departure from uregular basis – gross non-performing assets (NPAs) at 8.4 percent were flat QoQ against the sharp improvement usually seen in Q4.The brokerage expects asset quality to least as 75 % of MMFS’ book is under moratorium despite its rural focus. “We expect gross NPAs of around 10.4 percent by FY21.”