Prabhudas Lilladher recommended accumulate rating on Mahindra and Mahindra Financial Services with a target price of Rs 553 in its research report dated April 26, 2018.
Prabhudas Lilladher's research report on Mahindra and Mahindra Financial Services
MMFS earnings were in-line with estimates with PAT at Rs4.2bn (PLe: 4.4bn) on the back of lower provisioning as collections & recoveries were better than expected. Operational miss was from lower income from yield pressure despite better than expected AUM growth of ~18% YoY and on higher opex due to one-off expenses. Management remains optimistic on improving rural cash flow and improving infra activity which should lead to growth of 18-20% in FY19 across segments and will lower provisioning requirement. Rural recovery should agur well for growth and recovery from NPAs can bring tailwind to earnings helping deliver ROA of 2.6-2.8% by FY20.
We retain Accumulate with revised TP of Rs553 (up from Rs530) based on 3.3x Mar-20 ABV (rolled from Sep-19) inclusive of Rs69 as value of subsidiaries.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Subscribe to Moneycontrol Pro's Annual plan for Rs 399/- for the first year. Use coupon PRO2020 (Available on Web & Android only).