Mahindra Finance Q4 Results Review: NIMs Declined; Asset Quality Improved; IDBI Capital Maintains 'Buy'

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

IDBI Capital Report

Mahindra and Mahindra Financial Services Ltd.’s net interest margins declined by 10 basis points QoQ led by decline in yield on assets. Management guided for NIMs to improve from here on with positive impact of rate cut on cost of funds.

Asset quality improved with GS3 at 3.7% versus 3.9% QoQ led by higher write offs. Q4 generally is strong quarter with respect to collections. AUM growth slowed down to 17% YoY (19% YoY Q3 FY25) led by lower disbursements; we expect 16% CAGR over FY25-27E.

Net interest income grew by 12% YoY led by decline in NIMs. Pre provision operating profit grew by 3% YoY led by lower other income (down 79% YoY). PAT declined by 32% YoY led by higher provisions (up 88% YoY). Thus, RoA declined to 1.7% (Q4 FY25) versus 2.8% (Q3 FY25) as against guidance of 1.8-2.0% FY25.

We have largely maintained our estimates and maintain Buy with target price of Rs 325 valuing it at 1.8X FY27E adjusted book value.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.