Motilal Oswal Bullish On This Large Cap NBFC: Buy For 19% Return, Target Price 260

Leading brokerage firm Motilal Oswal recommends investors to buy Mahindra & Mahindra Financial Services Ltd with a target price of Rs 260. If you buy Mahindra & Mahindra Financial Services now at the current market price of Rs 218, you can get potential return of 19%. The stock is currently trading 7% down from its 52-week high level.

Mahindra & Mahindra Financial (MMFS) reported a 2QFY23 Core PAT of INR5b (5% beat), which declined 51% YoY. Reported PAT (including extraordinary loss of INR5.5b) declined 56% YoY, but grew ~101% QoQ to ~INR4.5b in 2QFY23. Check key takeaways below:

1. Mahindra & Mahindra Financial Services Stock Outlook

The current market price of the NBFC stock is Rs 218 apiece with 52-week high at Rs 235 apiece and 52-week low at Rs 127 apiece, respectively. It has a market capitalisation of Rs 26,946.91 crore.

2. Mahindra & Mahindra Financial Services Return

The 5-years return of the stock is negative 50%, 3-years return is negative 39%, and 1 year return is positive 12%. The stock has jumped 12% in last 3-months and 9% in last 1 month.

3. Mahindra & Mahindra Financial Services Valuation

According to Motilal Oswal, "We model an AUM/PAT CAGR of 24%/39% over FY22-FY24E for an FY24 RoA/RoE of 1.9%/11.4%, respectively. Maintain BUY with a TP of INR260 (based on 1.8x FY24E BVPS)."

MMFS is benefitting from the strong sectoral tailwinds and its parent Mahindra & Mahindra (M&M)'s strong recovery in auto volumes.

4. About Mahindra & Mahindra Financial Services

It came into existence on January 1, 1991 as Maxi Motors Financial Services Limited and received certificate of commencement of business on February 19, 1991. The name was changed to Mahindra & Mahindra Financial Services Limited on November 3, 1992. It is registered with the RBI as an NBFC with effect from September 4, 1998 under Section 45IA of the Reserve Bank of India Act 1934.

Disclaimer

The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.