Akash Jain
Mahindra & Mahindra Financial Services is one of India��s leading non-banking finance companies focused in the rural and semi �� urban sector is the largest Indian tractor financier. Primarily in the business of financing purchase of new and pre-owned auto and utility vehicles, tractors, cars, commercial vehicles, construction equipments and SME Financing.
At current market price of Rs 463 (Face value: Rs 2), the stock trades at a P/BV of 3.2x which we believe is cheap as compared to other listed NBFCs. In Q4FY18, the company witnessed strong 17.8�percent YoY growth in AuM and a sharp 22�percent QoQ decline in GNPA.
The company's Q4FY18 consolidated net profit rose 79.4 percent at Rs 513.1 crore against Rs 286 crore, in the same quarter last year. The company improved its Return on Assets significantly from 1 percent in FY17 to 1.9 percent in FY18. With improving rural cash flows, recovery from NPAs would help the company to improve its ROA of 2.6-2.8�percent by FY20.
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