Mahindra & Mahindra Financial Services - Rich valuations & tough macro limit upside - Emkay

- MMFS' Q4FY13 results ahead of expectation with NII at Rs6.6bn and Adj. PAT at Rs3.1bn. NIM's contracted by 24bps yoy to 9.9%

- Seasonal asset quality improvement strong with 22/30% qoq decline in GNPA/ NNPA, contrary to our expectations. Provision cover improves a tad to 66% from 62% in Q3

- Strong asset growth 9% qoq in Q4FY13 implies higher blended LTV. Change in mix towards Cars and used CV portfolio may be the reason for the same

- At 2.4/2.0x FY14E/15E ABV, stock fairly prices in 26% CAGR in earnings over FY12-15. Retain HOLD with TP of Rs216 (2x FY15 core ABV)

Source : Equity Bulls

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