Moneycontrol
Jun 21, 2017 09:42 AM IST | Source: Moneycontrol.com

Accumulate Mahindra and Mahindra; target of Rs 1711: Way2Wealth

Way2Wealth has recommended accumulate rating on Mahindra and Mahindra with a target price of Rs 1711 in its research report dated June 19, 2017.

Accumulate Mahindra and Mahindra; target of Rs 1711: Way2Wealth

Way2Wealth's research report on Mahindra & Mahindra


The domestic tractor volume sold by M&M increased by 23% compared to 18% industry growth resulting in market share improvement to 42.7% during the year, highest ever market share gain of 1.8% points. Yuvo range of tractors, launched by M&M during H2FY17 has been well received by its customers. The company is also working on a higher than 50HP tractor in Swaraj division.


Outlook


Based on its core earnings, the stock at Rs 1389 is trading at a PE multiple of 11.6xFY19E and an EV/EBIDTA of 6xFY19E, excluding its subsidiary value of Rs 549per share. We have assigned FY19E PER of 16x to its core earnings and have valued the listed subsidiaries at 25% discount to the market price. We maintain our ACCUMULATE recommendation on the stock with SOTP‐based target price of Rs 1711per share.


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