Mahindra & Mahindra Financial Services has target of Rs 370, says Jigar Shah, Senior Vice President of Kim Engineering Securities.
“We were impressed with the quarterly earnings of M&M Financial Services which was coming in the back drop of the farm sectors output dropping and also the drought situation etc. The company is doing a large amount of tractor financing as well as finances utility vehicle, cars and two wheelers. The earnings were 15% above our expectations. The net interest margins improved because of lower cost of funding and we think this is very much sustainable going by the growth in automotive and most importantly the company’s provisioning was very good. Their NPL management was outstanding in the wake of what is happening in the farm sector. I think that should do away with the concerns. We have valued the stock at 2 times next years adjusted book. Our target price works out to Rs 370 per share which is substantially higher than the current about Rs 245-250.”
(MoneyControl)
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