Review

In this edition, we have reviewed M & M Financial Services and WPIL. We suggest our reader-investors to HOLD in M & M Financial Services and WPIL.





We had previously recommended Mahindra & Mahindra Financial Services in volume 33, issue no. 12, dated May 14 - 27, 2018 under the ‘Special Report’ segment. It was recommended based on business growth, growth in rural cash flows and improving asset quality. 

Mahindra & Mahindra is a non-banking finance company (NBFC) which provides financial services in rural and semi-urban areas across India. The company offers a range of products which includes financing for buying vehicles to be used for commercial and/ or personal purpose, tractors, small and medium enterprise loans and several other financial products. In India, it is one of the top tractor financiers. Through its housing finance subsidiary, Mahindra Rural Housing Finance, the company facilitates lending for low and medium income households. Mahindra Insurance Brokers Limited is involved in life and non-life insurance products through tie-ups with various insurance companies.

On the consolidated financial front, for Q1FY20, the company reported an increase in net sales by 23 per cent to Rs.2821.87 crore from Rs.2292.72 crore for Q1FY19. For Q1FY20, PBT stood at Rs.159.94 crore, a decrease by 67.25 per cent from Rs.488.42 crore for Q1FY19. In Q1FY20, the profit after tax fell by 66.34 per cent to Rs.108.46 crore from Rs.322.27 crore in Q1FY19.

Mahindra & Mahindra Financial Services recently signed a share subscription, share purchase and shareholders’ agreement with Sri Lankan company Ideal Finance Limited (Ideal Finance). As per the agreement, Mahindra Finance will acquire up to 58.20 per cent stake in Ideal Finance. After completion of the acquisition, Ideal Finance will be a subsidiary of Mahindra Finance. Thus we recommend a HOLD to our investor - readers.





We had recommended WPIL in volume 34, issue no. 2, dated December 24, 2018 - January 6, 2019, under the Cover Story. The stock was trading at Rs.858 then and was recommended owing to healthy financials, attractive valuations and strong order book.

WPIL Ltd is mainly engaged in the manufacturing of pumps, grey iron, castings and sluice valves. WPIL now offers system engineering and complete solutions to all kinds of water and waste-water handling and transportation needs. The product range of the company includes vertical turbine pumps, vertical mixed flow and axial flow pumps, submersible pumps, horizontal centrifugal pumps, etc. WPIL’s standalone revenue for Q1FY20 came in at Rs.86.78 crore as against Rs.142.58 crore in the corresponding quarter last year, registering 39.1 per cent yoy decline. The EBITDA for the quarter fell by 37.4 per cent yoy to Rs.22.32 crore as against Rs.35.63 crore in Q1FY19, with a corresponding margin expansion of 73 bps. The PAT for the quarter came in at Rs.15.01 crore as against Rs.24.18 crore in the corresponding quarter last year, a decline of 37.9 per cent yoy. The company’s operations at both European facilities Gruppo Aturia Italy and Rutschi France supported by Aturia International are contributing to the company’s top line. WPIL continues to leverage its expanding product portfolio and market infrastructure across the spectrum of water management and is now wellpositioned in the power, municipal, irrigation and industrial sectors. The efforts of various state governments to provide a boost to the irrigation sector with the onset of normal monsoons this year will augur well for the company. Looking at the above mentioned points, we recommend a HOLD

(Closing price as of Aug 28, 2019)