MMFSL shares have fallen about 22% in the past one year
MMFSL shares have fallen about 22% in the past one year

For all the troubles non-banking financial companies (NBFCs) have faced in the past one year, Mahindra and Mahindra Financial Services Ltd (MMFSL) has done well to report profit growth before provisions and tax of 28% year-on-year for the March quarter.

But investors seemed hardly impressed with the results of the firm, which is engaged primarily in financing the purchase of new and pre-owned vehicles, construction equipment and SME (small and medium-sized enterprises) financing. MMFSL’s shares have declined 4.5% after the company declared its March quarter results last week.

Despite decent profit growth, investors appear worried about the lack of growth in disbursements. Total disbursements for the March quarter declined by about 1% year-on-year. “Since the onset of the liquidity crisis in Sep’18, MMFSL has curtailed SME disbursements, which were experiencing over 30% growth rates up until 2QFY19,” said analysts at JM Financial Institutional Securities…