FinQuest Securities has recommended a buy rating on Mahindra & Mahindra Financial Services with a target price of Rs 275 in its October 1, 2009 research report. On Thursday, the share closed at Rs 233.35, up Rs 3.30, or 1.43%.
“The company’s asset quality risk is already priced due to aggressive provisioning policy. Currently the stock is trading at 1.6x FY10 ABV, a significant discount to Shriram Transport finance. We believe that MMFSL will make 17% RoE’s by FY11 (15.4% in FY09) led by strong earnings growth and should trade at 1.7x FY11 ABV. We initiate coverage with a target price of Rs 275,” says FinQuest Securities’ report.
