Emkay Global Financial Services Ltd | Mahindra Finance (MMFS IN) Q4FY17 Results First Cut: Asset quality pressures weigh down on earnings

-          Net Op. Inc. +11% yoy (+49% qoq) at Rs11.1bn – 4% above expectations

-          Other Inc. -19% yoy (+32% qoq) at Rs173mn

-          Opex +19% yoy (+11% qoq) at Rs4.04bn

-          Op. Profit +7% yoy (+84% qoq) at Rs7.25bn – 2% above expectations

-          Provisions +232% yoy (-14% qoq) at Rs3.6bn – 21% above expectations

-          PAT -37% yoy at Rs2.34bn – 12% below our expectations and 29% below Bloomberg consensus estimates

At Rs340, the stock trades at 2.6x FY19E BV and 18x FY19E EPS. We currently have a SELL rating on the stock with a target price of Rs240.

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