Accumulate M&M; target of Rs 748: PLilladher

41974 Investors following Mah and Mah. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate M&M; target of Rs 748: PLilladher

Prabhudas Lilladher is bullish on Mahindra and Mahindra (M&M) and has recommended accumulate rating on the stock with a target of Rs 748 in its February 07, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Hold Patel Eng; target of Rs 113: KRChoksey Hold Kamat Hotels; target of Rs 135: ICICIdirect.com Buy Kansai Nerolac; target Rs 994: Firstcall Research ALSO READ See previous views by Prabhudas Lilladher See what other Experts & Brokerages are saying about Mah and Mah See messages about Mah and Mah Mah and Mah BSE | NSE 30/05/12 Are Mutual Funds betting on Mah and Mah?

Prabhudas Lilladher is bullish on Mahindra and Mahindra (M&M) and has recommended accumulate rating on the stock with a target of Rs 748 in its February 07, 2012 research report.

"Mahindra & Mahindra (M&M) reported 14.0% QoQ growth in its top-line at Rs83.9bn (PLe: Rs79bn). Tractor volumes grew by 14.6% QoQ, whereas the automotive segment volumes grew by 5.3% QoQ. The positive surprise came in on ASP/Vehicle which was higher by 5.1% QoQ led by price hikes. Raw material/sales ratio increased by 170bps QoQ on account of higher contribution of traded goods from Mahindra Vehicle Manufacturers (MVML). Due to tight cost control over other expenditure (adj. for Forex reversal of Rs398.6m charge), the EBITDA margins decline was restricted to 60bps QoQ at 11.7% (PLe-12.4%). Absolute EBITDA grew by 6.3% YoY to Rs9.8bn (PLe: Rs9.6bn). On account of higher than expected depreciation, the Adj. PAT grew by a muted 1.0% YoY at 6.2bn (PLe-Rs6.5bn)."

"Automotive segment reported 47.4% YoY growth in the revenues at Rs51.1bn and a 8.2% PBIT margin (9.9% in Q2FY12). Farm Equipment Segment (FES) reported a revenue growth of 35.5% YoY at Rs32.5bn, with PBIT margins at 15.6% (15.3% in Q2FY12). The combined revenue grew by 33.9% YoY at Rs82.1bn (Rs83.0bn in Q2FY12). OPM of the combined entity improved by 20bps QoQ to 13.5%. EBITDA for the combined entity grew by 12.6% YoY with Adj. PAT (for forex) growing by 9.7% at Rs6.7bn."

"We expect M&M to outperform the volume growth of the auto industry given strong traction for its recently launched products (XUV 500). On sum-of-parts valuation, excluding Rs170/share assigned to its subsidiaries, the stock currently trades at 11.3x its standalone FY13E EPS, which in our view is fair. We expect combined entity profit to be higher by ~5% to the standalone profit in FY13E. We value the combined entity at 12.0x FY13E EPS of Rs48.3. Maintain 'Accumulate' on account of 8.4% upside from the current levels," says Prabhudas Lilladher research report.

FIIs holding more than 30% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment