Why is M & M Fin. Serv. falling/rising?

Strong Quarterly Earnings Drive Investor Confidence

The recent surge in M & M Fin. Serv.’s share price is underpinned by its impressive quarterly results for September 2025. The company reported its highest-ever net sales at ₹5,026.19 crores, signalling strong revenue growth. More importantly, profit before tax excluding other income (PBT less OI) rose sharply by 44.53% to ₹735.47 crores, while net profit after tax (PAT) increased by 45.0% to ₹564.48 crores. These figures demonstrate not only top-line expansion but also significant improvement in profitability, which has evidently bolstered investor sentiment.

Such financial strength is further reflected in the company’s return on equity (ROE) of 10%, indicating efficient utilisation of shareholder capital. Despite trading at a premium with a price-to-book value of 2.1, the valuation appears justified given the company’s earnings growth and market position.

Outperformance Against Benchmarks and Sector

M & M Fin. Serv. has consistently outperformed the broader market indices and its sector peers. Over the past week, the stock gained 8.57%, significantly ahead of the Sensex’s modest 0.56% rise. This trend extends over longer periods, with the stock delivering a 23.96% return in the last month compared to Sensex’s 1.27%, and an impressive 40.47% return over the last year against the benchmark’s 8.43%. Even over three and five years, the stock has outpaced the Sensex by wide margins, generating returns of 78.08% and 123.56% respectively, compared to 37.12% and 94.13% for the index.

On the day in question, the stock hit a new 52-week high of ₹372.8, reflecting strong buying interest and positive momentum. It also outperformed its sector by 2.33%, reinforcing its relative strength. The stock’s price remains comfortably above all key moving averages—5-day, 20-day, 50-day, 100-day, and 200-day—indicating a sustained bullish trend.

However, it is worth noting that investor participation has declined recently, with delivery volume on 27 Nov falling by 58.37% compared to the five-day average. Despite this, liquidity remains adequate for sizeable trades, supporting continued market activity.

Institutional Backing and Valuation Considerations

Another factor contributing to the stock’s rise is its high institutional holding of 41.88%. Institutional investors typically possess greater analytical resources and a longer-term investment horizon, which can provide stability and confidence in the stock’s prospects. Their continued interest suggests a positive assessment of the company’s fundamentals and growth trajectory.

While the stock’s price-to-earnings growth (PEG) ratio stands at 6.2, indicating a relatively high valuation compared to earnings growth of 13.2% over the past year, the market appears to be pricing in the company’s strong performance and future potential. This premium valuation is supported by the company’s consistent ability to generate market-beating returns and maintain profitability.

Conclusion: A Stock Riding on Strong Fundamentals and Momentum

In summary, the rise in Mahindra & Mahindra Financial Services Ltd’s stock price on 28-Nov is primarily driven by its robust quarterly earnings, sustained outperformance relative to the Sensex and sector peers, and strong institutional support. The company’s ability to deliver record net sales and significant profit growth has reinforced investor confidence, pushing the stock to new highs. Although valuation metrics suggest a premium, the market appears to reward the company’s consistent growth and profitability.

Investors should note the recent dip in delivery volumes, which may warrant monitoring for any shifts in market participation. Nonetheless, the stock’s liquidity and technical positioning above key moving averages indicate continued interest and potential for further gains in the near term.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →