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'M&M Financial Services
RECO : BUY TP : Rs870
Investment Rationale
§ We expect low penetration of consumer durables, rising rural income levels and improving rural asset values to
help MMFS report a 25% CAGR in AUMs to Rs232bn over FY11-13E
§ Making branch level staff accountable for recoveries has helped MMFS bring down its GNPAs from 7.6% to
5.0% over FY08-11E. We expect GNPAs to reduce to 4% by FY13E
§ Lower dependence on assignments and strong pricing power to give resilience to NIMs. We expect NIMs to be
robust at 11.4% over FY11-13E
Valuations
§ We expect 27.1% CAGR in earnings over FY11-13E. The return ratios are expected to be robust at 4% RoAs
and 23% RoE. Valuations undemanding at 2.5x/2.2x FY12E/FY13E ABV.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
'M&M Financial Services
RECO : BUY TP : Rs870
Investment Rationale
§ We expect low penetration of consumer durables, rising rural income levels and improving rural asset values to
help MMFS report a 25% CAGR in AUMs to Rs232bn over FY11-13E
§ Making branch level staff accountable for recoveries has helped MMFS bring down its GNPAs from 7.6% to
5.0% over FY08-11E. We expect GNPAs to reduce to 4% by FY13E
§ Lower dependence on assignments and strong pricing power to give resilience to NIMs. We expect NIMs to be
robust at 11.4% over FY11-13E
Valuations
§ We expect 27.1% CAGR in earnings over FY11-13E. The return ratios are expected to be robust at 4% RoAs
and 23% RoE. Valuations undemanding at 2.5x/2.2x FY12E/FY13E ABV.
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