Jefferies sees an 8% upside potential in M&M Finance based on strong loan growth and stable assets. They have assigned a ‘Hold’ rating to the scrip with an upside target price of Rs 295. “Our price target of Rs 295 is based on 1.8x core P/B (Sept-25E), said Jeffries in its report.
Mahindra Finance posted a 26% YoY growth in Assets Under Management (AUM), accompanied by 0.9% MoM uptick in November 2023. “While disbursements remained steady on a monthly basis, they marked 16% YoY increase. The surge in estimated monthly AUM is likely attributed to the conversion of trade advances in loans, which are included in AUM but not in disbursements,” said Jeffries in its report.
Jefferies’ report further highlighted that, despite maintaining a stable collection efficiency of 94% compared to the previous month, it was slightly lower than the corresponding period in November 2022 (96%). Stage 2 and 3 assets showed a consistency with levels observed in September 2023. The report concludes that with a valuation of 1.8 times the estimated book value as of December 2025, Mahindra Finance’s current valuation seems reasonable. However, the report underscores the necessity for clearer visibility regarding the trajectory for achieving a higher Return on Assets (ROA) to drive a potential rerating.
Jefferies further pointed out that the robust growth, improved Net Interest Margin (NIM), and reduced credit costs could act as Potential upside factors. Conversely, downside risks involve a slowdown in rural markets and increasing pressures on asset quality.
M&M Finance shares have yielded an early 13% return year to date for investors. The stock price gained 0.42% in the last five days and 3.44% in the last one month, while it dropped 9.72% in the last six months.