Motilal Oswal is bullish on Mahindra Financial Services has recommended buy rating on the stock with a target price of Rs 518 in its research report dated January 25, 2019.
Motilal Oswal 's research report on Mahindra Financial Services
MMFS reported PAT of INR3.2b (14% miss), driven by higher-than-expected opex and tax rate. Adjusted for INR500m profit on MIBL stake sale in 3QFY18, PAT declined by 8% YoY. AUM and disbursements remained on a robust growth trajectory. Value of assets financed continued increasing robustly at 24% YoY. However, we note that the base is quite high 4Q onward. Given the seasonality, AUM grew 6% QoQ (+30% YoY) to INR631b.
We cut our FY19 EPS estimate by 5% to factor in higher taxes, but raise our FY20 EPS estimate by 2%. Our SOTP-based TP is INR518 (Dec’20E based). Maintain Buy.
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