Thread by @MarketLearner_

Mahindra & Mahindra Financial Services Ltd Update📊

#MMFin #StockMarket #Stocks #investing #Investment

@KommawarSwapnil @kuttrapali26 @caniravkaria @mystock_myview @Ishan_Narayan_ @STOCKBAGGER1 @harrie007 @josephseby78 @kaushaldarshan_ @vaibhavkh15 @TheFactFindr

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Contents :-

👉About the company
👉Sectorial view
👉Company outlook
👉Expectations
👉Vision 2025
👉Key risk
👉Technical analysis

First, lets try to know about the company🏣🏣

👉M&M finance is one of the India's leading non-banking finance company focused in the rural & semi-urban area.

👉The company finances purchase of new & pre-owned auto & utility vehicles, tractors, cars, commercial vehicles, construction equipment & SME financing.

(2/14)

Now, lets have a sectorial view🏙️🏙️

👉Auto sector is recovering, but private capex is yet to pick up.

👉Auto financing & asset quality trends are improving.

👉NBFCs with diverse product offering, strong ALM management, liquidity buffers, risk management, well capitalized have growth opportunities.

(3/14)

Now, time for company outlook👀👀

👉With strong underlying demand, improving credit filters, strong business growth might sustain.

👉Earnings trajectory is expected to remain healthy as credit costs might moderate in 2nd half of FY23.

👉Major cleanup has been done by accelerated write offs.

(4/14)

👉Asset quality metrics is expected to improve further on the back of strong collection efficiency.

👉They also plan to diversify growth engines & increase non-vehicle financing share in SME, LAP & digital segment.

👉Earnings might surprise positively in the future.

(5/14)

👉Disbursements are growing at good pace, led by cars/Auto/UV which shd support AUM growth.

👉SME financing is doing well which comprises short term loans.

👉Overall sentiments are positive & cash flow is improving which should propel disbursement & AUM growth in FY23.

(6/14)

👉SME, LAP & Digital finance are the new product lines which had incremental volumes.

👉The company gained market share in car/UV segment.

👉Company maintained leadership position in tractor & UV financing segments.

(7/14)

👉Opex growth in FY23 is likely to be higher led by investments in tech, talent & new product segments.

👉Company thinks investments in tech & team have been made, so cost-to-assets ratio might fall below 3% in medium term vs 3.2% reported in Q1FY23.

(8/14)

👉Impact of change in NPL recognition norms may be low as reflected in sharp fall in stage 2 loans & sustained ECL buffers.

👉Even after adopting RBI's NPA circular, company plans to maintain current stage 3 PCR of 58%.

(9/14)

👉Margins could be affected in the future due to :-

1. The company plans to cater affluent rural customers (lower yields).

2. Increase in COF although company could pass on the increased rates with a lag.

(10/14)

Now, lets have a look at the expectations🎯🎯

👉Expect the company to deliver 2.3% RoA by FY24.

👉Expect the company to deliver 12.7% RoE by FY24.

👉Expect AUM to clock a CAGRof 14% over FY22-24.

(11/14)

Now lets have a look on what's Vision 2025 📺📺

👉Given strong demand, company has a Vision 2025 with following deliverables :-

1. Gross stage-3 at sub-6%.
2. Double AUM by FY25 led by new product segment.
3. Maintain NIM of approx 7.5%.
4. RoA at approx 2.5%.

(12/14)

Now, lets have a look at the key risk🛑🛑

👉A key risk would be an economic slowdown led by slower AUM growth and higher - than - anticipated credit cost which might affect the company's earnings.

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Now, lets have a look at the company technically📈📉

Weekly chart of M&M Finance.

(14/14)

I hope my thread helped you in knowing Mahindra & Mahindra Finance better than before. Please don't forget to join our telegram channel its absolutely FREE & we are doing a lot of hard work here. telegram.me/TheMarketLearn…

Thanks for reading,
The Market Learner.