Shares of Mahindra & Mahindra Financial Services rallied 8% after the opening bell on Wednesday, July 22 as brokerages revised target prices after April to June quarter results for fiscal 2027.
Mahindra & Mahindra Financial Services shares rose as much as 8.05% to Rs 378 apiece. The scrip was trading 5.73% higher by 9:43 am, while the benchmark Nifty 50 index was down 0.67%
The lender reported stronger-than-expected Q1 numbers, driven by lower credit costs, resilient asset quality and stable margins. In Q1FY27, Mahindra & Mahindra Financial Services reported at net profit of Rs 927 crore, a 75% jump from its Rs 529 crore in same quarter previous year. Total income rose 14% to Rs. 5,725 crore from Rs. 5,013 crore.
Here's what brokerages are saying -
According to brokerages, the company began the current fiscal on a strong footing despite a seasonal weak quarter, led by improving underwriting, healthy disbursement growth and lower provisioning that boosted earnings. They also mentioned that the improving asset quality and technology-driven measured have initiatives strengthened the medium-term outlook, while noting the role of monsoon as a key factor for the rest of FY27.
Morgan Stanley
Maintained 'Equal-weight'; Target Price Raised To Rs. 370 From Rs. 335
Profit was 7% above estimates due to lower operating and credit costs.
Raised FY27-FY29 EPS estimates by 8%.
Higher target price reflects macro risks, historical volatility and cyclicality.
Macquarie
- Maintained 'Underperform'; Target Price At Rs. 270
Said the company made a strong start to the year.
Profit beat estimates due to lower credit costs.
Margins remained resilient and asset quality improved.
Sustainability remains the key monitorable.
Jefferies
- Maintained 'Hold'; Target Price Raised To Rs. 365 From Rs. 325
Profit beat estimates due to lower provisions.
Asset quality remained resilient.
Expects gradual improvement in AUM growth and stable net interest margins.
Technology and management initiatives are improving underwriting.
Retained Hold due to monsoon-related risks.
Nomura
- Maintained 'Buy'; Target Price Raised To Rs. 415 From Rs. 400
Profit beat its estimate by 25% and Bloomberg consensus by 11% due to lower operating expenses and credit costs.
Said asset quality trends remained healthy despite a seasonally weak quarter.
Raised FY27-FY29 EPS estimates by 2%-4% after lowering credit cost assumptions and adjusting cost of funds.
Expects 16% disbursement growth in FY27-FY28 despite monsoon-deficit risks.
Management targets 16%-18% medium-term loan CAGR, driven by growth in both vehicle finance and new businesses.
Reaffirmed 'Buy' as improving asset quality and organisational changes strengthen the investment case.
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