Mahindra Finance Q2 Results Review - Another Quarter Of Disappointment; Growth Guidance Lowered: Systematix

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..Systematix Research Report.Mahindra and Mahindra Financial Services Ltd. reported significant miss in earnings (Rs 2.4 billion versus estimate of Rs 4.3 billion) due to 44 basis points QoQ compression in net interest margins to 7.0% and increase in credit cost to 2.8% (2.5% in Q2). While assets under management growth remains healthy at 8% QoQ (27% YoY), disbursements growth was moderate at 12.6% YoY. Adjusted for dealer finance of Rs 50 billion (versus Rs 30-35 billion in Q2 FY23), disbursement growth would have been flat YoY. Management lowered its assets under management growth guidance to 20% from 26% earlier. While stressed assets pool (Stage-II plus Stage-III) improved to 10% (versus 10.7% in Q1), credit cost was higher at 2.8% (versus 2.5% in Q1), as forward flow from stage-II to stage-III led to Rs 1.2 billion of additional provisioning requirement. Management expects the majority of this additional provisioning to get reversed in H2 as monsoon has been good. We have reduced our earnings estimates by 14%/8% for FY24/25 to factor in lower growth/net interest margins and higher credit cost. We maintain our 'Hold' rating, with a revised target price of Rs 260 (Rs 280 earlier), based on 1.65 times FY25E book value..Click on the attachment to read the full report:.Mahindra Finance Q2 Review - Weak Operating Performance Overshadowing Robust Asset Growth: Dolat Capital.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 Q2 Results Review - Another Quarter Of Disappointment; Growth Guidance Lowered: Systematix

Mahindra Finance reported significant miss in earnings due to continued pressure on NIMs and higher stage-III provisions

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