Hold Mahindra and Mahindra Financial Services; target of Rs 260: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Mahindra and Mahindra Financial Services

Mahindra & Mahindra Financial Services (MMFS) reported healthy AUM growth (+21%YoY/4.8%QoQ) in Q3 and stood at Rs.773bn with stable margins of 7.5% amid rising interest cost environment. Write-offs of Rs4.9bn were taken compared to Rs5.3bn taken in Q2FY23. As of Q3FY23, GNPA (IRACP) was higher ~Rs 12.77bn, in comparison to GS3 (IND-AS). Management does not foresee any impairment charge on account of IRACP migration in FY23. Maintain ‘HOLD’ rating on the stock. Re-rating can happen if MMFS continues to improve asset quality and also maintains these margin levels in coming quarters.

Outlook

We maintain ‘HOLD’ rating and increase our TP to Rs260 (1.9x on Sep’24E PABV) from Rs230 (earlier:1.9x Sep’24E PABV) as we increase our FY24/25 NII estimates by 4.4%/4.2%, given increase in yields to 16.3%/16.3% (from 15.8%/16.0% earlier).

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Mahindra & Mahindra Financial - 06 -02 - 2023 - prabhu