Accumulate Mahindra Finance, target Rs 515: Emkay

Emkay Global Financial Services has an accumulate call on Mahindra & Mahindra Financial Services Ltd. with a target price of Rs 515. The current market price of Mahindra & Mahindra Financial Services Ltd. is Rs 482.95. Time period given by the brokerage is a year when Mahindra & Mahindra Financial Services Ltd. price can reach the defined target.

Mahindra & Mahindra Financial Services Ltd., incorporated in the year 1991, is a Large Cap company (having a market cap of Rs 30091.33 Crore) operating in Finance sector.



Investment rationale by Emkay
Over the past few years, Mahindra Finance (MMFS) had been reeling under the pressure of deteriorating asset quality and rising credit costs. However, the scenario is improving gradually. While the government’s focus on Agriculture and Rural Infra along with forecast of normal monsoon will boost tractor demand, pressure on credit costs will ease, as the shift to 90-day NPA recognition is already completed. With demand for tractors sustaining, we expect positive earnings surprise in the form of previous year’s recoveries. We recommend ACCUMULATE with a TP of Rs515, corresponding to ~3.0x P/Adj FY20E book.