Buy Mahindra and Mahindra Financial Services; target of Rs 345: Sharekhan

Sharekhan's research report on Mahindra and Mahindra Financial Services

M&M Financial Services Limited (M&M Fin) reported healthy disbursement growth of 15% y-o-y at Rs. 4,400 crore in August, exhibiting better credit demand in rural and semi-urban areas. Disbursements growth has moderated on expected lines due to a higher base in the trailing 12 months. Loan book grew by 27% y-o-y. Collection efficiency remained broadly stable y-o-y as well as m-o-m at 96% despite uneven monsoon. Gross stage-2 assets and gross stage-3 assets remained range bound vs. Q1FY2024.

Outlook

At the CMP, the stock trades at 2.0x/1.6x its FY2024E/FY2025E ABV. We reiterate Buy with an unchanged PT of Rs. 345.