Prayesh Jain of IIFL told CNBC-TV18, "The overall business sentiment is definitely weak in auto space. Look at the last year's trend where dieselisation was happening and diesel vehicles were outpacing the petrol variants by a huge margin, that trend is also changed in this year. There has been marked slowdown in diesel vehicle demand and that is likely to impact Mahindra and Mahindra (M&M) especially if the competition is building up in the utility vehicle (UV) category."
He further added, "We believe that as against 60 percent of vehicles being sold in FY13 were diesel variants we might see that evening out somewhere in the region of 45-50 percent over the medium-term. UV demand is likely to remain strong given the strong acceptance of the UV sector."
"The main trigger for M&M is the tractor demand. The last quarter has been very strong for tractor demand, and after being sluggish for last one and a half to two years tractor demand is seeing some signs of revival. If that sustains, which is a very high margin business for M&M, we might see a strong profit growth for M&M. Its subsidiary businesses are also doing well. So the upside is left in M&M and we have a buy rating on the stock with a target price of around Rs 1135," Jain said.