BQ Prime'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 BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Mahindra and Mahindra Financial Services Ltd. has disclosed that the Reserve Bank of India has revoked the ban imposed on the company from using third-party agencies for repossessions. This will likely further boost the already improving asset quality.
Separately, Mahindra Finance continues to report robust growth of ~22% / 4% QoQ in disbursements / assets under management respectively in Q3 FY23 and improvement in gross stage II/III assets to 8.5% / 6.2% from 9.7% / 6.7% in Q2 FY23.
As such, the company is on the path to achieve its vision 2025 goals of gaining two times AUM growth, less than 6% GS-III and ~2.5% return on asset.
There is room for further increase in the multiple given the company's long-term one-year forward price/book average of 1.9 times.
Rerating of the stock will depend on sustained higher growth (leverage remains low due to lower growth in the past) given that FY24E return on equity still remains less than 13%. Risks include higher-than-anticipated provisions, net interest margin shrinkage and an uncertain macro-environment impacting rural demand.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime 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 BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
