Reduce Mahindra & Mahindra Finance, target price Rs 145: ICICI Securities

ICICI Securities has reduce call on Mahindra & Mahindra Financial Services with a target price of Rs 145. The current market price of Mahindra & Mahindra Financial Services Ltd. is Rs 169.

Time period given by analyst is one year when Mahindra & Mahindra Financial Services Ltd. price can reach defined target.

Mahindra & Mahindra Financial Services Ltd., incorporated in the year 1991, is a Large Cap company (having a market cap of Rs 20843.39 Crore) operating in NBFC sector.

For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 2566.84 Crore, down -15.52 % from last quarter Total Income of Rs 3038.37 Crore and down -16.35 % from last year same quarter Total Income of Rs 3068.68 Crore. Company reported net profit after tax of Rs -1590.29 Crore in latest quarter.

Investment Rationale
With revival in economic activity, there was hope on roll-backs, upgrades and provisioning write-backs. With improved customer cashflow and reduction in stress bucket, visibility enhances on stage-3 assets being managed at ~11% by Q4FY22 (15.5% in Q1FY22). Endeavour to contain net stage-3 at 50% disbursement growth in H1FY22, the brokerage now estimates AUM growth at 7% for FY22E (earlier ~5%). Volatility in earnings, asset quality behaviour and growth underperformance to peers would cap rerating beyond 1.1x FY23E book. It maintains REDUCE rating on the stock with a revised target price of Rs 145 (earlier: Rs135).

Promoter/FII Holdings
Promoters held 52.2 per cent stake in the company as of June 30, 2021, while FIIs held 19.4 per cent, DIIs 15.1 per cent and public and others 13.3 per cent.

(Disclaimer: Views and recommendations given in this section are the analysts’ own and do not represent those of Please consult your financial adviser before taking any position in the stock/s mentioned.

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