Mahindra & Mahindra Financial Services Ltd. share price target

MMFS reported a 3QFY22 PAT of INR8.95b (64% beat), driven by net provision write-backs of INR1.5b (v/s our credit cost estimate of INR2.8b). Operating profit rose 5% QoQ/6% YoY to INR10.6b (in-line) due to lower interest expenses driven by a sharp decline in the cost of borrowings. This was slightly negated by an increase in OPEX (INR5.3b, up 8% QoQ and 26% YoY) due to higher activity levels and collection costs in 3QFY22. Business assets stood flat QoQ, but fell 4% YoY, to INR636.4b. Disbursements rose 24% QoQ and 28% YoY to INR80.3b...

Operating profit rose 36% QoQ to INR10.2b (10% beat) due to higher interest income from the write-back of NPA upgrades. This impact on PPOP was slightly negated by an increase in OPEX (INR4.9b, up 17% QoQ and 24% YoY) due to higher activity levels and collection costs in 2QFY22. Business assets stood flat QoQ, but fell 6% YoY, to INR636b. Disbursements rose 67% QoQ and 61% YoY to INR64.8b Given its long lineage and strong parentage, MMFS is well-equipped to deal with the stressed pool of loans and achieve upgrades via collections...

Mahindra & Mahindra Financial Services (MMFS) reported a mixed set of Q4FY21 numbers wherein topline growth improved on account of better margins but lower disbursements led to slower AUM growth. NII increased 12.2% YoY, 9.2% QoQ to | 1511 crore on the back of improvement in NIMs (calculated) that were up 63 bps QoQ, 35 bps YoY to 7.4% owing to slightly better asset quality and liquidity management. Employee cost increased 32% YoY to | 282 crore, mainly on account of lower base effect due to reversal of provisions on incentives YoY. Credit cost...