Hold M&M Financial; targe Rs 250: Nirmal Bang
Brokerage house Nirmal Bang has recommended hold rating on Mahindra & Mahindra Financial Services (MMFS) with a price target of Rs 250 in its July 30, 2013 research report.
July 30, 2013 / 18:59 IST
Nirmal Bang's report on Mahindra & Mahindra Financial Services (MMFS)
"Mahindra & Mahindra Financial Services (MMFS) Q1FY14 performance was broadly in line with expectations. Bottom line was impacted by higher provisions. NPAs inched up owing to seasonality factor and some stress in the commercial vehicle sector and in Southern regions. Management has sounded cautious on the commercial vehicle segment and has categorically mentioned that it will focus only on light commercial vehicles. Tractors and used cars are witnessing strong growth and with good monsoon and increasing tractor sales company is positive on growth front. Considering the current measures taken by RBI to curb liquidity, company has increased yields in the range of 50-60 bps to protect its margins. However, some compression on margins will be witnessed primarily due to change in product mix. MMFS’s major strength lies in its widespread and deep penetrated branch network and we believe that MMFS has a large addressable market with further scope for deeper penetration into rural areas. Despite macros headwinds we believe that a diversified product mix coupled with rural leadership and strong parentage will continue to drive the success story. At CMP, the stock is trading at 12.61x FY14E and 10.75x FY15E EPS and 2.67x FY14E and 2.35x FY15E P/ABV. We recommend investors to HOLD the stock and BUY on decline for a target price of Rs 250 generating return of 13.6 percent," says Nirmal Bang research report.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. 
Read More
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
