Feb 09, 2013, 03.47 PM | Source: Moneycontrol.com
Dolat Capital is bullish on Mahindra & Mahindra (M&M) and has recommended buy rating on the stock with a target price of Rs 1050 in its February 08, 2013 research report.
, Dolat Capital |
"M&M reported top-line revenue at Rs 107.7bn, up 29% YoY led by 11% YoY volume growth. The auto sector volumes grew 18% YoY, while tractor sales were down 1% YoY. Its utility vehicle market share is down from 56.7% in FY12 to 47.6% in FY13 (April-December period). The company’s operating margins declined 20bps QoQ to 11.2%. EBIDTA for the quarter was Rs 12.1bn, up 18% YoY. This was mainly led by higher raw material expense. The company reported its PAT at Rs 8.3bn, up 26% YoY. EPS for the quarter was Rs 14.2.
View and valuation: We remain positive on M&M as it continues to post robust growth. The newly launched Quanto is also gaining momentum. Macro headwinds may affect the demand in the tractor segment. We estimate tractor sales to grow at a CAGR of ~7% during FY13-15. The management mentioned that although they are not looking at any new brand launch in FY14 in the auto segment, the refreshes will continue to happen. Also, three new brands will be launched in FY15. Buy the stock with a target price of Rs 1050," says Dolat Capital research report.
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