Mahindra and Mahindra Financial Services Ltd shares climbed over 8% in intraday trade on Wednesday after the company posted better-than-expected earnings for the third quarter ended December (Q3).
M&M Financial Services said net profit jumped 14.6% to Rs 365.3 crore in the December quarter compared with Rs 318.7 crore in the same quarter last year. Revenue increased 15.7% to Rs 2,580.6 crore versus Rs 2,230.4 crore a year ago.
Buoyed by the earnings, M&M Financial Services shares hit a high of Rs 379.50 apiece in early trade on Wednesday. Though they later pared gains to trade 4.8% higher at Rs 368.15 at 12:18 pm.
After Q3 results, research firm Jefferies gave a ‘Buy’ rating on the M&M Financial Services stock while raising the target price to Rs 415 from Rs 405 earlier. Jefferies said Q3 profit beat the estimates as net interest income (NII) and lower operating expenses offset higher provisions.
Auto slowdown, weak rural sentiment may affect the company’s loan growth in the near term, while it should gain from a potential cyclical recovery, Jefferies added.
International research firm Credit Suisse also gave an ‘Outperform’ rating on the stock with a target of Rs 410 per share. The higher credit costs led to a 6% year-on-year decline in profit before tax, it said, adding that it has cut FY20-22 EPS (earnings per share) estimates by 3-4% due to the same reason.
Citi, however, gave a ‘Sell’ call on M&M Financial Services with a target of Rs 310 per share. Growth and asset quality are closely tied to rural sentiment and infra investments, it said, adding that improvement in the rural economy will be key to the company’s outlook.
Comments
0 comment