Buy M&M Financial; target of Rs 1242: Firstcall Research

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26 Aug, 2025 12:21

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Firstcall Research is bullish on M&M Financial and has recommended buy rating on the stock with a target of Rs 1242 in its January 21, 2013 research report.
 
“Mahindra and Mahindra Financial Services Limited is one of India’s leading non-banking finance companies. Through a vast network of branches, the company provides personalized finance for the widest range of utility vehicles, tractors and cars, focusing on the rural and semi-urban sector. MMFSL currently has a network of 628 offices and Total Assets Under Management of Rs. 23770 Crores. MMFSL’s rural financing is considered as the cornerstone of poverty reduction, rural development and inclusive growth in many parts of the country. The company loans to over 20,00,000 customers belonging to the low income groups have proved to be a catalyst in helping rural India surge ahead in a big way. The company business model is socially inclusive as help customers who are at the bottom of the income or social pyramids to grow by providing them loans based on their future earning capacities. It is also r continuous endeavour to develop skill sets at the local level. The company currently provides employment to over 9700 people. The company is to be the preferred provider of retail financing services in the rural and semi-urban areas of India.”
 
“Mahindra & Mahindra Financial Services Ltd is part of the US $15.9 billion Mahindra Group, reported its financial results for the quarter ended 31st Dec, 2012. The third quarter witness a healthy increase in overall sales as well as profitability on account of maintaining its leadership position for vehicles and tractors in the rural and semi urban markets. The company’s net profit jumps to Rs.2162.06 million against Rs.1593.19 million in the corresponding quarter ending of previous year, an increase of 35.71%. Revenue for the quarter rose by 37.79% to Rs.10573.27 million from Rs.7673.39 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.19.21 a share during the quarter, registering 23.66% increase over previous year period. Profit before interest, depreciation and tax is Rs.7739.23 millions as against Rs.5624.66 millions in the corresponding period of the previous year.”
 
“At the current market price of Rs 1099, the stock P/E ratio is at 14.68 x FY13E and 11.91 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.74.86 and Rs.92.30 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 33% and 28% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 8.12 x for FY13E and 6.98 x for FY14E. Price to Book Value of the stock is expected to be at 3.18 x and 2.51 x respectively for FY13E and FY14E. We recommend ‘BUY’ in this particular scrip with a target price of Rs 1242 for medium to long term investment,” says Firstcall Research report.

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