Add Mahindra Finance, target price Rs 288: HDFC Securities
HDFC Securities has an add call on Mahindra & Mahindra Financial Services (Mahindra Finance) with a target price of Rs 288. The current market price of Mahindra & Mahindra Financial Services is Rs 267.85. The company, incorporated in 1991, is a largecap company with a market cap of Rs 33056.60 crore, operating in NBFC sector.
Mahindra & Mahindra Financial Services key products/revenue segments include Interest, Fees & Commission Income, Rental Income, Income From Sale Of Share & Securities for the year ending 31-Mar-2024.
Financials For the quarter ended 30-09-2024, Mahindra & Mahindra Financial Services (M&M Finance) has reported a 57% increase in net profit to Rs 369.5 crore. Despite the growth, the figure came in below the market estimates. The company reported a net profit of Rs 235.2 crore in the same quarter of the previous year, with total revenue reaching Rs 3,897 crore in Q2 of FY25. The company's net interest income (NII) amounted to Rs 1,963.2 crore, surpassing the estimates of Rs 1,858.6 crore. This represents a year-on-year increase of 19.3%, up from Rs 1,645.5 crore.
Investment Rationale
Mahindra & Mahindra Financial Services has revised its FY25 guidance further downwards with RoA and loan growth guidance of 1.8-2% and 18-20%, respectively. While the new leadership endeavours to build a stable franchise with ongoing transformation and portfolio diversification, earnings volatility remains a key deterrent for any further re-rating. HDFC Securities maintains ADD with revised SOTP-based target price
