Mahin­dra & Mahin­dra Fi­nan­cial Ser­vices Ltd

(BSE Code: 532720) (CMP: Rs.447.35) (FV: Rs.2) By Nayan Pa­tel

Money Times - - Techno Funda -

Mahin­dra & Mahin­dra Fi­nan­cial Ser­vices Ltd (M&M Fi­nance) is a sub­sidiary of Mahin­dra & Mahin­dra Ltd (M&M), In­dia's largest trac­tor and util­ity ve­hi­cle man­u­fac­turer. M&M Fi­nance started its jour­ney in the ru­ral non-bank­ing fi­nance in­dus­try two decades back and has steadily di­ver­si­fied its of­fer­ings and ex­tended its reach over the years. To­day, it is a lead­ing non-bank­ing fi­nance com­pany (NBFC) cater­ing to cus­tomers pri­mar­ily in the ru­ral and semi-ur­ban ar­eas. It pro­vides fi­nanc­ing for auto and util­ity ve­hi­cles (UVs), trac­tors, cars, com­mer­cial ve­hi­cles (CVs) and pre-owned ve­hi­cles. It is also en­gaged in mu­tual fund distri­bu­tion, fixed de­posits and per­sonal loans. Mahin­dra In­surance Bro­kers Ltd (MIBL), M&M Fi­nance’s sub­sidiary, dis­trib­utes in­surance prod­ucts through tie-ups with var­i­ous lead­ing in­surance com­pa­nies. In the hous­ing fi­nance seg­ment, it has strength­ened its op­er­a­tions in Ma­ha­rash­tra, Gu­jarat, Ra­jasthan, Tamil Nadu, Andhra Pradesh, Te­lan­gana, Ch­hat­tis­garh, Ker­ala, Kar­nataka, Mad­hya Pradesh, Ut­tar Pradesh, Ut­tarak­hand and Bi­har through Mahin­dra Ru­ral Hous­ing Fi­nance Ltd (MRHFL). Through Mahin­dra As­set Man­age­ment Co. Pvt Ltd (MAMCPL), it of­fers a va­ri­ety of mu­tual fund schemes with spe­cial fo­cus in ru­ral and semi­ur­ban ar­eas. Mahin­dra Fi­nance USA LLC is a joint ven­ture be­tween M&M Fi­nance and a sub­sidiary of the Rabobank group that of­fers whole­sale in­ven­tory fi­nanc­ing to deal­ers and re­tail fi­nanc­ing in USA to pur­chase Mahin­dra group prod­ucts.

M&M Fi­nance has an eq­uity cap­i­tal of Rs.122.9 crore sup­ported by re­serves of Rs.9180.19 crore. The pro­mot­ers hold 51.19% of the eq­uity cap­i­tal, FIIs hold 27.51% and Mu­tual Funds hold 12.09%, which leaves 9.21% stake with the in­vest­ing pub­lic.

Dur­ing Q2FY19, M&M Fi­nance re­ported 133% higher

PAT of Rs.381.39 crore on 39% higher in­come of Rs.2103.27 crore and an EPS of Rs.6.21. Dur­ing H1FY19, it re­ported 419% higher PAT of Rs.650.44 crore on 24% higher sales of Rs.4029.11 crore and an

EPS of Rs.10.58. It paid 200% div­i­dend for FY18. Cur­rently, the stock trades at a P/E of 20x and looks at­trac­tive for in­vest­ment based on its fi­nan­cial per­for­mance.

In­vestors can buy this stock with a stop loss of Rs.400. On the up­per side, it could zoom to Rs.535-550 in the medium-to­long term.

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