Buy M&M Financial Services - Result Update - Emkay

Reco: BUY M&M Financial Services
CMP: Rs 659
Target Price: Rs 800

Results inline with expectation

MMFS' results inline with expectation with NII at Rs4.2bn and net profit at Rs1.5bn. Strong AUM growth of 40%, with slight margin contraction of 30bps drives growth.

Strong growth in new/used CV drives improvement in product mix. Lower share of bank term loans in funding (-468 bps) and higher bonds/securitization helps protect NIMs.

MMFS' asset quality witnessed slight deterioration with GNPA / NNPA increasing by 10.4%/ 14.1% qoq. Provision cover also came down by 84bps qoq to 74.4%.

Consistent increase in branch addition along with interest rate cycle reversing, to keep the earnings momentum strong. Maintain BUY with PT of Rs800.

Source : Equity Bulls

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