M&M Financial Services Results inline with expectation BUY :Emkay

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M&M Financial Services

Results inline with expectation

BUY

CMP: Rs640                                       Target Price: Rs800

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n     MMFS’ results inline with expectation with NII at Rs3.3bn and net profit at Rs1.0bn

n     NII grew by 22.8%yoy to Rs3.9bn driven by 32.4%yoy growth in value of asset financed, albeit NIM’s contracted by 207bps yoy to 9.9% (although increased qoq by 61bps)

n     MMFS’ asset quality improved with GNPA ratio coming down from 4.6% in Q1FY12 to 4.0%, while NNPA ratio  remained stable at 1%

n     Lowered FY12E/FY13E NII estimates by 3.1%/3.4% adj for the securitization inc. However with lower opex and prov,  earning remains unchanged. Maintain BUY with PT of Rs800