Nov 02, 2012, 03.15 PM | Source: Moneycontrol.com
Dolat Capital is bullish on Mahindra and Mahindra (M&M) and has recommended buy rating on the stock with a target of Rs 930 in its October 25, 2012 research report.
, Dolat Capital |
“M&M reported top-line revenue at Rs 98.1bn, up 33% YoY led by 17% YoY volume growth. The auto sector volumes grew 26% YoY, while tractor sales were down 1% YoY. M&M’s exports in Q2 were up 87% to 10,349 units. Average realization was up 2% QoQ led by high-end product sales.”
“The company’s operating margins declined 40bps QoQ to 11.4%. EBIDTA for the quarter was Rs 11.2bn, up 28% YoY. The decline was mainly led by higher other expenses. The company reported its PAT at Rs 9.1bn, up 22% YoY. EPS for the quarter was Rs 15.4. This was primarily led by a one-time dividend by its subsidiaries to the tune of Rs 1.7bn.”
“We remain positive on M&M as it continues to post robust growth. With launches (Yuvraaj, the new XUV-500, GIO, Maxximo and Mahindra Navistar trucks) and new markets, we expect the growth momentum to continue. Macro headwinds may affect the demand in the tractor segment. Accordingly, we estimate volume growth of 3% in FY13. The stock is currently trading at a P/E of 14.2x FY14E. We recommend accumulate on the stock,” says Dolat Capital research report.
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