Mahindra Finance Q1 Results Review - Net Profit Miss On Higher Credit Cost; PPOP Inline: Dolat Capital

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..Dolat Capital Report.Mahindra and Mahindra Financial Services Ltd. reported profit after tax of Rs 3.5 billion (down 48% QoQ; +58% YoY) and 35% below our estimate. The miss is attributable to higher credit cost of 2.5% (estimate: 1.2%) on account of write-off amounting to Rs 3 billion (down 48% QoQ and 45% YoY). Gross stage-III ratio improved 14 bps QoQ while 50 bps adjusted for write-offs.Pre-provision operating profit came inline at Rs 10 billion sustaining a PPOP return on asset of 4.7%. This was aided by lower opex to assets (down 70 bps QoQ) offsetting a sharp decline (70 bps QoQ) in net interest margin on account of higher cost of funds (+20 bps QoQ) and rising share of lower yielding prime book. Mahindra Finance expects an improving trajectory for margin hereon.We view the risk reward is turning favorable with growth returning (FY23 / Q1 FY24 disbursements up 80% / 28% YoY respectively) and asset quality fears abating. However, we will look for consistency in delivery on the new strategy (profitability of growth and stable asset quality) for turning constructive on the company outlook. Maintain reduce with a revised target price to Rs 325 (+3%) on higher business growth..Click on the attachment to read the full report:.Shriram Finance Q1 Results Review - A Mixed Bag; Strong On Growth, Weak On Margins: Systematix.DISCLAIMERThis 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.

Mahindra Finance Q1 Results Review - Net Profit Miss On Higher Credit Cost; PPOP Inline: Dolat Capital

Mahindra Finance expects an improving trajectory for margin hereon.

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