M&M Finance: SEBI RA Deepak Pal Flags Breakout Above This Key Support Level

M&M Finance is showing bearish indicators on technical charts, but a breakout above ₹259-260 could lead to a rally, according to the analyst.

Based on the daily chart, Mahindra & Mahindra Financial Services appears to be in a short-term downtrend, with technical indicators reflecting weak momentum, SEBI-registered analyst Deepak Pal said.

The relative strength index (RSI) is around 44, indicating a lack of buying strength, and while the Moving Average Convergence/Divergence (MACD) remains in positive territory, it doesn’t indicate any clear bullish crossover, Pal highlighted.

The Parabolic SAR, a technical indicator for price direction, also shows a short-term downtrend. The stock’s trading activity over Monday’s session saw it remain below its 14-day and 55-day exponential moving averages (EMA), confirming ongoing weakness, the analyst noted

At the time of writing, the M&M Financial Services stock was 2.7% at ₹268.05.

The analyst observed that for the past three sessions, the stock has consistently held above the ₹259 mark, indicating the formation of a strong short-term support. On May 28, the stock also bounced from around ₹258.50, rallying to ₹288.50 by June 9, after taking support at the 14-day EMA.

The stock appears to be forming a double bottom pattern around the ₹259 - ₹260 zone, and even if a minor correction occurs, it would find strong support at ₹250, he added.

If the shares hold above ₹261 and gain momentum, it could retest the ₹270 level in the coming sessions. However, a strict stop-loss should be placed at ₹250, Pal said.

Fundamentally, the company’s long-term prospects remain strong. It trades at a P/E ratio of around 17x to 20x, with an EPS in the range of ₹11–12. It has a moderate debt-to-equity ratio typical of NBFCs.

Backed by a strong book value and a diversified loan portfolio, it offers a dividend yield of 2% to 3%. It maintains a return on equity (RoE) of 10% to 12%, with promoter holding at around 52%.

Backed by the Mahindra Group, its strong rural and semi-urban presence, improving asset quality, and declining NPAs position the company well for stable and sustained growth, Pal concluded.

Year-to-date, M&M Finance shares were up 3.8%

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