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Snapshot Incorporated as Maxi Motors Financial Services Limited, Mahindra & Mahindra Financial Services Limited (MMFSL) has a pan-India presence mainly in the rural and semi-urban areas. The company offers an entire gamut of financial services in the rural and semi-urban segments. Investment Rationale Excellent understanding of rural markets: The main market for tractors being the rural and semi-urban areas, the company has not only gathered an excellent understanding of the rural markets but also established a nation-wide network of 559 branches (as on June 30, 2011) spread across 24 states and 4 union territories.
Strong recall value: The company has a strong brand recall value, along with high levels of acceptance due to the presence of the parent company in the tractor segment.
Significant potential in rural housing finance: The only company in the country to cater exclusively to the housing finance requirements in the rural areas. NHB has taken a 12.5% stake in the company.
Recovery in cash: Since a significant portion of the collections takes place in cash, recovery is a specialized job. The company has deployed significant human resources and invested in technology for effective monitoring of cash collections.
Valuation & Recommendation We expect the company to post a Net Interest Income of Rs.1522 crore for FY’12E and Rs.1743.6 crore for FY’13E. The net profit for FY’12E and FY’13E is expected to be Rs.554.4 crore and Rs.671.6 crore respectively. The EPS for FY’12E and FY’13E should be Rs.53.3 and Rs.64.6 respectively. We expect the company to trade at 2.5x FY’13E Adj. book value to arrive at a price target of Rs.830 over the next 9 to 12 months. This provides an upside of 28% from the present levels.
Mahindra & Mahindra Financial Services Ltd
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Snapshot Incorporated as Maxi Motors Financial Services Limited, Mahindra & Mahindra Financial Services Limited (MMFSL) has a pan-India presence mainly in the rural and semi-urban areas. The company offers an entire gamut of financial services in the rural and semi-urban segments. Investment Rationale Excellent understanding of rural markets: The main market for tractors being the rural and semi-urban areas, the company has not only gathered an excellent understanding of the rural markets but also established a nation-wide network of 559 branches (as on June 30, 2011) spread across 24 states and 4 union territories.
Strong recall value: The company has a strong brand recall value, along with high levels of acceptance due to the presence of the parent company in the tractor segment.
Significant potential in rural housing finance: The only company in the country to cater exclusively to the housing finance requirements in the rural areas. NHB has taken a 12.5% stake in the company.
Recovery in cash: Since a significant portion of the collections takes place in cash, recovery is a specialized job. The company has deployed significant human resources and invested in technology for effective monitoring of cash collections.
Valuation & Recommendation We expect the company to post a Net Interest Income of Rs.1522 crore for FY’12E and Rs.1743.6 crore for FY’13E. The net profit for FY’12E and FY’13E is expected to be Rs.554.4 crore and Rs.671.6 crore respectively. The EPS for FY’12E and FY’13E should be Rs.53.3 and Rs.64.6 respectively. We expect the company to trade at 2.5x FY’13E Adj. book value to arrive at a price target of Rs.830 over the next 9 to 12 months. This provides an upside of 28% from the present levels.
Mahindra & Mahindra Financial Services Ltd
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