MOSL: MAHINDRA FINANCIAL SERVICES (Buy)-Stable quarter despite tough environment
Mahindra Financial Services: Stable quarter despite tough environment
(MMFS IN, Mkt Cap USD3.6b, CMP INR417, TP INR518, 24% Upside, Buy)
- 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.
- MMFS maintained spreads on a sequential basis at 6.9%, despite a 26bp sequential increase in cost of funds to 8.76%.
- Gross stage 3/net stage 3 loans declined YoY from 12.3%/8.2% to 7.7%/5.8%. Total provisions as a percentage of loans stood at 1.9% v/s 3.0% a quarter ago and 4.1% a year ago. PCR including standard assets provisions declined QoQ by 1,000bp to ~49%. This was largely due to write-off of INR9.85b during the quarter.
- Liquidity situation: Management cited that it is borrowing from every possible source without glitches. Disbursements were normal during the quarter.
Mahindra & Mahindra Financial Services is a non-banking financial company, provides financial products and services in the rural and semi-urban markets in India. Co. offers vehicle financing for auto and utility vehicles, tractors, cars, commercial vehicles, two wheelers, three wheelers, and construction equipment; pre-owned vehicle financing for cars, multi-utility vehicles, tractors, and commercial vehicles; housing finance for new houses, and house renovation and improvements; and SME financing services, including project finance, equipment finance, and working capital finance. Co. also provides personal loans.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.