M&MFIN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | M&MFIN | Market Cap | 49,824 Cr. | Current Price | 359 ₹ | High / Low | 412 ₹ |
| Stock P/E | 19.4 | Book Value | 166 ₹ | Dividend Yield | 1.81 % | ROCE | 9.02 % |
| ROE | 12.3 % | Face Value | 2.00 ₹ | DMA 50 | 357 ₹ | DMA 200 | 312 ₹ |
| Chg in FII Hold | -0.48 % | Chg in DII Hold | 0.05 % | PAT Qtr | 899 Cr. | PAT Prev Qtr | 569 Cr. |
| RSI | 46.6 | MACD | 0.22 | Volume | 16,30,921 | Avg Vol 1Wk | 27,57,183 |
| Low price | 232 ₹ | High price | 412 ₹ | PEG Ratio | 0.58 | Debt to equity | 4.99 |
| 52w Index | 70.3 % | Qtr Profit Var | -0.02 % | EPS | 17.8 ₹ | Industry PE | 18.9 |
📊 Financials: Mahindra & Mahindra Financial Services (M&MFIN) has a market cap of 49,824 Cr. with quarterly PAT at 899 Cr., slightly higher than 569 Cr. in the previous quarter, though profit variation is flat (-0.02%). ROE at 12.3% and ROCE at 9.02% reflect moderate efficiency. Debt-to-equity ratio of 4.99 indicates high leverage, which is typical for NBFCs but adds risk. EPS stands at 17.8 ₹, supported by stable earnings. Cash flows are cyclical, tied to lending and repayment cycles in rural and semi-urban markets.
💹 Valuation: Current P/E of 19.4 is close to the industry average of 18.9, suggesting fair valuation. P/B ratio is ~2.16 (359 ₹ / 166 ₹), which is reasonable. PEG ratio of 0.58 indicates earnings growth is attractively priced. Intrinsic value appears close to current levels, making the stock moderately appealing for accumulation.
🏦 Business Model & Competitive Advantage: M&MFIN operates as a non-banking financial company (NBFC), focusing on vehicle financing, rural lending, and SME credit. Its competitive advantage lies in strong rural presence, brand association with Mahindra Group, and wide distribution network. However, profitability is sensitive to credit cycles, interest rates, and asset quality.
📈 Entry Zone: With RSI at 46.6 (neutral) and DMA 200 support near 312 ₹, accumulation around 330–350 ₹ is favorable. Current price at 359 ₹ is close to fair value, offering a reasonable entry for long-term investors.
🕰️ Long-Term Holding Guidance: M&MFIN is fundamentally stable with growth potential in rural financing. Long-term holding is recommended, but investors should monitor leverage levels and asset quality risks closely.
Positive
- Strong rural presence and brand association with Mahindra Group.
- EPS of 17.8 ₹ supported by stable earnings.
- PEG ratio of 0.58 highlights attractive growth potential.
- DII holdings increased slightly (+0.05%).
Limitation
- High debt-to-equity ratio (4.99) adds financial risk.
- ROCE (9.02%) and ROE (12.3%) are moderate compared to peers.
- FII holdings decreased by 0.48%, showing reduced foreign confidence.
- Quarterly profit variation flat (-0.02%), indicating limited momentum.
Company Negative News
- High leverage raises concerns about asset quality in downturns.
- Flat profit variation despite revenue growth.
Company Positive News
- Quarterly PAT improved to 899 Cr. from 569 Cr.
- Strong rural demand supports long-term growth outlook.
Industry
- NBFC sector benefits from rural credit demand and vehicle financing growth.
- Industry P/E at 18.9 highlights M&MFIN’s fair valuation.
Conclusion
⚖️ M&MFIN is a fundamentally stable NBFC with strong rural presence and growth potential. Entry around 330–350 ₹ is favorable, and long-term holding is recommended, though investors should remain cautious of high leverage and asset quality risks.