Hold The Stock Of Mahindra & Mahindra Financial Services For Rs. 200 Target Price: Says Prabhudas Lilladher

Brokerage firm Prabhudas Lilladher recommends investors to hold the stocks of Mahindra & Mahindra Financial Services. The company's asset quality marginally deteriorated with GS3 at 8.0% v/s 7.7% in Q3'22. MMFS has reported a decent set of numbers. Provisions at Rs. 6.4bn rose sharply up from Rs.64bn in Q4'22 due to elevated write-offs from repossessions.

Stock To Hold: Target Price & Financial Result

The Current Market Price (CMP) of Mahindra & Mahindra Financial Services is Rs. 187. Prabhudas Lilladher has estimated a Target Price for the stock at Rs. 200. This stock has the potential to give a 6.7% return, in the upcoming 1 year. This is a large-cap stock with a market capitalization of around Rs. 23,493 crore.

Stock Outlook
Current Market Price (CMP)	Rs. 187
Target Price	Rs. 200
Potential 1 year return	6.70%
52 week high share price	Rs. 212.50
52 week low share price	Rs. 128.00

The company's write-offs of Rs. 5.7bn were taken in this quarter but management believes this should moderate over the course of FY23. However, used vehicles AUM with a strong 16% QoQ growth could be a major growth driver, as their demand is really picking up now.

"Tractors/Cars segments remain soft although the company has maintained leadership position in tractor and Mahindra UV financing segments. The company's PAT coming in at Rs. 2.2 bn below our estimates of Rs. 6.1bn due to a sharp rise in provisions. Our FY23 and FY24 estimates are unchanged, as cost pressures are expected to kick in and be compensated by strong AUM growth driven by a recovery in auto volumes. One has to closely monitor the credit costs and write-offs in the upcoming quarters. Hence we maintain our 'HOLD' rating on the stock and our price target remains unchanged at Rs. 200 as we value MMFS at 1.8x PABV Sep'24," according to brokerage firm Prabhudas Lilladher.

Disclaimer

The above stock was picked from the brokerage report of Prabhudas Lilladher. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.