Accumulate M&M; target of Rs 1400: Emkay

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26 Aug, 2025 12:21

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Emkay Global Financial Services research report on Mahindra and Mahindra>> In FY14, a strong 19% growth in Pick ups and tractors volumes were offset by a 17% decline in UV segment>> FY15 likely to be lackluster as UV and tractor demand expected to remain weak>> FY16 to be more exciting - planned launch of 2 compact and one large SUV; expect demand revival in large SUVs>> Retain ACCUMULATE; raise TP to Rs 1,400“In FY14 M&M's Automotive Segment saw a decline of 10% driven by a 17% decline in Utility vehicles. Pick ups (2T> LCVs <3.5T) was the only segment to register a growth at a strong 19.7%. Overall company volumes declined marginally by 0.5%, despite the poor show in the Automotive Segment owing to a strong 20% growth in tractors. M&M’s standalone cash flow from operations at Rs 37.1 bn, declined 10.1% YoY despite flattish cash profits owing to increase in working capital requirement on the back of higher inventory/receivables from seasonal demand in tractors. Free Cash Flows were further strained on (a) higher capital expenditure of Rs 16.8 bn vs Rs 13.9 bn YoY, largely allocated to plant and equipment and intangible assets under development (b) higher 'gross' investments into subsidiaries at Rs 14.1 bn vs Rs 11.7 bn YoY, largely invested in Ssangyong (Rs 4 bn), Mahindra Two-wheelers (Rs 3bn) and Mahindra Sanyo Special Steel (Rs 2.1 bn). Accumulate M&M with a target of Rs 1400,” says Emkay Global Financial Services research report.

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