Moneycontrol Be a Pro
Get App
Last Updated : Apr 25, 2019 04:26 PM IST | Source:

Buy Mahindra and Mahindra Financial Services; target of Rs 504: HDFC Securities

HDFC Securities is bullish on Mahindra and Mahindra Financial Services has recommended buy rating on the stock with a target price of Rs 504 in its research report dated April 25, 2019.

Broker Research @moneycontrolcom
  • bselive
  • nselive
Todays L/H

HDFC Securities' research report on Mahindra and Mahindra Financial Services

Asset quality improved sharply, a 4Q phenomenon, exceeding expectations. G/NNPAs dipped ~20/11% QoQ to ~Rs 40.6/32.8bn (~5.9/4.8%). A relentless and sustained focus on collections resulted in a ~20% YoY drop in GNPAs. While susceptibility to rural stress (elections, poor monsoon etc.) remains, MMFS is better equipped than before. We have factored in GNPAs of ~6% over FY 19-21E. LLP reversals were ~Rs 1.15bn as recoveries improved. A rural-focused business model results in volatile recoveries. We expect quarterly ECL provisions to follow suit. Low coverage causes us to increase our LLP assumptions (~1.4% vs. 1.1% in FY19).


Better than expected improvement in asset quality (GNPAs: ~5.9%) and provision reversals (~Rs 1.15bn) drove PAT (+95/88%). Maintain BUY with a TP of Rs 504 (2.75x Mar-21E ABV of Rs 177 + Rs 18 for MIBL).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .
First Published on Apr 25, 2019 04:26 pm
Follow us on
Available On
PCI DSS Compliant