Mahindra Finance - Fraud Detected At One Of The Branches; Downgrade To Sell: Centrum Broking

"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..Centrum Broking Report.Mahindra and Mahindra Financial Services Ltd. in its press release stated that it has detected fraud in one of the company’s branches in the North East. The fraud involved forgery of KYC documents in retail vehicle loan disbursals leading to embezzlement of company funds. The company estimates that the financial impact of this fraud is unlikely to exceed Rs 1.5 billion. The fraud involved Area Business Manager and other employees of the concerned branch of the Company in North East. Investigations are at an advances stage, necessary corrective actions have been identified and are at various stages of implementation, including arrests of few persons involved. The estimated amount involved of Rs 1.5 billion is almost 3.7 times of average company disbursements of Rs 410 million per branch suggesting that fraud has been going on for several months/years. This may impact our earnings estimates for Q4 FY24 and FY24 by ~22% and 8.2%, respectively and Net worth by ~0.8% for FY24E. .In our view, there may slowdown in growth as company works on strengthening its internal processes. The board meeting to consider financial results for Q4 FY24 and full year FY24 has been deferred to 30th May 2024. We expect more clarity on this fraud and corrective actions initiated during 4Q results. Given the negative development, we have cut our Target multiple on standalone business to 1.5 times from two times earlier. We roll forward to FY26 from H1 FY26 and value the standalone business at Rs 230 and subsidiaries at Rs 19 to arrive at our target price of Rs 249. Downgrade to Sell..Click on the attachment to read the full report:.Mahindra Logistics Q4 Results Review - Inline; Improved Express Performance \nEnhances Ebitda: Motilal Oswal.DISCLAIMERThis 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."

Mahindra Finance - Fraud Detected At One Of The Branches; Downgrade To Sell: Centrum Broking

Given the negative development, we have cut our target multiple on standalone business to 1.5 times from two times earlier

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Mahindra Finance - Fraud Detected At One Of The Branches; Downgrade To Sell: Centrum Broking

Given the negative development, we have cut our target multiple on standalone business to 1.5 times from two times earlier

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