Buy Mahindra & Mahindra Financial Services, target Rs 600: Motilal Oswal Securities
Motilal Oswal Securities has a buy call on Mahindra & Mahindra Financial Services with a target price of Rs 600.
The current market price of Mahindra & Mahindra Financial Services is Rs 512.15.
Time period given by the brokerage is one year when Mahindra & Mahindra Financial Services price can reach the defined target.
"The business environment for MMFS is getting better, with multiple tailwinds in each product class. Asset quality data signal early signs of revival. Recoveries and growth will drive a sharp increase in RoE from 10.5 per cent in FY18 to 15 per cent+ in FY20. We have increased AUM growth estimate to 20 per cent from 16 per cent, and reduced credit cost to 2.2 per cent/2.0 per cent for FY19/20E, driving PAT upgrade of 8 per cent/16 per cent in FY19/20E. The company’s long-term prospects remain strong. Our SOTP-based target price is Rs 600," Motilal Oswal Securities said in a report.
The current market price of Mahindra & Mahindra Financial Services is Rs 512.15.
Time period given by the brokerage is one year when Mahindra & Mahindra Financial Services price can reach the defined target.
"The business environment for MMFS is getting better, with multiple tailwinds in each product class. Asset quality data signal early signs of revival. Recoveries and growth will drive a sharp increase in RoE from 10.5 per cent in FY18 to 15 per cent+ in FY20. We have increased AUM growth estimate to 20 per cent from 16 per cent, and reduced credit cost to 2.2 per cent/2.0 per cent for FY19/20E, driving PAT upgrade of 8 per cent/16 per cent in FY19/20E. The company’s long-term prospects remain strong. Our SOTP-based target price is Rs 600," Motilal Oswal Securities said in a report.
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