Mehabe score: 3 G Factor: 1 Piotski Score: 6 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 1 and Piotski score of 6.
Description
MMFSL is primarily engaged in providing financing for new and pre-owned auto and utility vehicles, tractors, cars and commercial vehicles. It also provides housing finance, personal loans, financing to small and medium enterprises, insurance broking and mutual fund distribution services. In addition, among other services, MMFSL offers wholesale inventory financing to dealers and retail financing to customers in the US for the purchase of tractor products through Mahindra Finance USA LLC, its joint venture with a subsidiary of the Rabobank Group. (Source : 201903 Annual Report Page No: 5)Site:M&MFINMain Symbol:M&MFIN
Stock trades at 157.0, below its 50dma 165.24 and below its 200dma 167.96. The stock remains bearish on technicals
The 52 week high is at 224.30 and the 52week low is at 106.57
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– has low interest coverage ratio.
– has a low return on equity of 9.90% for last 3 years.
-Dividend payout has been low at 11.54% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 24.3x. SBI Cards trades at the industry’s max P/E of 94.03x. M&MFIN trades at a P/E of 29.2x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 6.0. M&MFIN has a G-Factor of 1 and Piotski scoreof 6.
– Average 1 month return for industry is -3.8%. The max 1- month return was given by Bajaj Holdings: a return of 4.24 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 3001.0 cr compared to Rs 3101.0 cr for period ended Mar 2020, a fall of 3.2%
Operating Profits reported at Rs 1534.0 cr for period ended Mar 2021 vis-vis 1392.0 for period ended Mar 2020 .
Operating Margins expanded 622.8 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.75 compared to Rs -1.83 for previous quarter ended Dec 2020 and Rs 1.9 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 12050.0 cr for period ended Mar 2021 vis-vis sales of Rs 11995.0 cr for the period ended Mar 2020, a growth of 0.5%. The 3 year sales cagr stood at 15.1%.
Operating margins shrank to 696.0% for period ended Mar 2021 vis-vis 1702.0% for period ended Mar 2020, contraction of 100600.0 bps.
Net Profit reported at Rs 773.0 cr for period ended Mar 2021 vis-vis sales of Rs 1075.0 cr for the period ended Mar 2020, falling 39.1%.
Company reported a poor Net Profit CAGR of -13.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 5957.0 cr for period ended Mar 2021 vis-vis Rs -3115.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 5.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 41% on a 1 Year basis vis-vis a return of -17% over the last 3 Years. – The compounded sales growth on a TTM bassis is 0% vis-vis a compounded sales growth of 15% over the last 3 Years. – The compounded profit growth on a TTM basis is -38% vis-vis a compounded profit growth of -17% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 20.17% vis-vis 21.22% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 10.62% vis-vis 10.84% for Dec 2020
Conclusion
– – has low interest coverage ratio.
– has a low return on equity of 9.90% for last 3 years.
-Dividend payout has been low at 11.54% of profits over last 3 years
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 165.24 and is trading at 157.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
