June 08, 2016 / 16:43 IST
Way2Wealth's research report on M&M
M&M has reported its Q4FY16 and FY16 results which were in line with our estimates. Following are the key highlights: Overall Volumes grew by 13.5% YoY (UVs 16% YoY & Tractors 12% YoY). Net Sales grew by 12.9% YoY to Rs 101.6bn. EBITDA margins expanded by 134bp YoY to 12.5%. Adjusted PAT grew by 20.5% YoY to Rs 6.6bn.
Based on its core earnings the stock at Rs 1378 is trading at a PE multiple of 10.7xFY18E and an EV/EBIDTA of 6xFY18E, excluding its subsidiary value of Rs 500per share. We have assigned FY18E PER of 15x to its core earnings and have valued the listed subsidiaries to 20% discount to the market price. We maintain our ACCUMULATE recommendation on the stock with SOTP-based target price of Rs 1,718 per share with 25% upside potential.
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