India Ratings & Research (Ind-Ra) has upgraded Mahindra & Mahindra Financial Services (MMFSL) long-term issuer rating to 'AAA' from 'IND AA+' with a stable outlook.

Mahindra & Mahindra and the upgrade follows the 'AAA/Stable' long-term issuer rating assigned to M&M on May 29, 2014. The rating action is underpinned by Ind-Ra's expectation of strong financial support to MMFSL from M&M on a timely basis, if required.

Ind-Ra considers MMFSL to be a 'core' subsidiary of M&M due to its high importance to M&M. MMFSL finances about one fourth of M&M’s total sales in rural and semi urban regions. MMFSL shares its parent’s brand name and has strong operational linkages with it. Ind-Ra has factored in support from M&M to MMFSL in arriving at the rating of M&M.

Shares of the company gained Rs 5.7, or 1.85%, to settle at Rs 314.15. The total volume of shares traded was 125,606 at the BSE (Thursday).