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Shares of Mahindra & Mahindra gained over a percent on Wednesday morning as investors reacted to the firm’s June quarter performance.
The stock touched an intraday high of Rs 938.85 and an intraday low of Rs 927.00.
Utility vehicle and tractor manufacturer Mahindra & Mahindra on Tuesday reported a 67 percent growth in net profit at Rs 1,257 crore for the quarter ended June, ahead of analyst estimates. This is combined profit of M&M and MVML, a manufacturing unit.
A Reuters poll of analysts had pegged the company’s bottomline to come in at Rs 1,180 crore. M&M’s net profit in the same quarter last year stood at Rs 752 crore.
The Mumbai-based maker of passenger vehicles, commercial vehicles, two and three-wheelers had clocked total automotive volume of 1,40,101 units, a growth of 20 percent, during the June quarter.
The growth was led by a resurgent demand for trucks and for three-wheelers. The maker of Scorpio, XUV500 and Bolero clocked a 9 percent growth in passenger vehicles (cars and SUVs) to 60,779 units during June quarter while commercial vehicle sales grew by 23 percent to 56,940 units.
Total tractor volumes rose by 19 percent to 1,00,784 units helped by a continued upward trend due to an expectation of a normal monsoon as well as improved buying power with the buyers with better yield.
The company’s revenues came in at Rs 13,358 crore, a growth of about 23 percent over the same period last year when it was Rs 10,877 crore. The Reuters poll had estimated revenues to come in at Rs 13,508 crore.
While the company is optimistic about consumption growth, it counts US tariffs as a risk.
Brokerage: Macquarie | Rating: Outperform | Target: Raised to Rs 1,050 from Rs 940
The global research firm believes that new models will boost UV sales growth in H2FY19. It has raised FY19-20 EPS estimates by 11-12 percent. It also said that the stock’s valuation is attractive, relative to Indian auto peers.
Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 1,005
The global research firm said that tractor outlook remains positive. It further sees the next leg of performance to be driven by a recovery in SUVs.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 1,063
The brokerage house said that currently there are leverage gains at play and a model cycle is the next trigger. It expects volume recovery to benefit the firm the most.
Brokerage: Credit Suisse | Rating: Outperform | Target: Raised to Rs 1,100 from Rs 1,030
The research firm is positive on the stock due to buoyant rural sentiment. It expects Q2 to be muted on shift of festive season. It also observed that tractor profitability remains strong with RoCE in excess of 100 percent.
Brokerage: Axis Cap | Rating: Upgrade to buy from hold | Target: Rs 1,042 from Rs 950
Axis Cap observed that the June quarter earnings Q1 earnings beat estimates by 5 percent driven by a strong margin. Further, the company was relatively most impacted among OEMs going into BS-VI emission norms. Tractors are expected to hit a downcycle possibly in FY21.
Brokerage: Jefferies | Rating: Buy | Target: Rs 975
The broking firm expects upcycle in tractors and LCVs to continue for rest of FY19. Management indicated strong rural outlook helped by normal monsoon.
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