Buy Mahindra and Mahindra Financial Services; target of Rs 498: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on Mahindra and Mahindra Financial Services

MMFS’ robust disbursal (+24/22%) and AUM (+31/6%) growth sustained. Asset quality improved as Gross/Net Stage III dipped further, by ~130/20bps to ~7.7/5.8% (in part, optical, due to higher w/os at ~Rs 9.85bn i.e. 17% of Op. Gross Stage III). Calc. NIMs were sequentially flat at ~7.9%. Notably, MMFS continues to expand its reach (added 17 branches in 3Q and 135 in the last 12 months).

Outlook

MMFS’ strong 3Q performance, corroborated by our ground check (Refer to our report titled Better than expected dated 21-Dec-18) reinforces our constructive thesis. Maintain BUY with an SOTP of Rs 498 (2.75x Dec-20 ABV of Rs 174.5 + Rs
18 for MIBL).

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