Shares of Mahindra & Mahindra Financial Services Ltd slipped over 4 percent to move into the red zone after the stock recorded a new 52-week high on Tuesday.
The non-banking financial company (NBFC) said on Monday that its disbursements increased by 80 percent year over year to ₹14,450 crore in Q3 FY23 and by 67 percent year over year to ₹4,650 crore in December 2022.
According to the company's exchange filing, stage-3 and stage-2 assets have seen sequential improvement in December and the quarter under review.
Following the news, the stock hit a 52-week high of ₹247.05 in early trade on Tuesday, however, it soon pared gains and declined to enter the negative zone as Jefferies maintained its 'underperform' rating.
The global research firm has a target of ₹175 per share, implying a downside of 34 percent from the current market price.
"We believe margins at Mahindra & Mahindra Financial Services could surprise negatively as yields should moderate due to stronger disbursements in lower yielding products and funding costs should rise as full impact of higher interest rates is reflected in cost of funds (CoF)," said the brokerage.
Further, the brokerage in its report said that most of the asset quality improvement of the NBFC is led by settlements/ write-offs rather than meaningful improvement in collections.
"After hitting a fresh 52 week high in today's session, prices have sharply corrected in today's session. It seems like 240 is a profit booking levels, and as long 240 is not crossed on closing basis, stock may remain tentative at higher levels, 222 is next support level," said Rajesh Bhosale - equity technical and derivative analyst, Angel One.
In the past year, the stock price outperformed its sector by 35.23 percent.
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