Sharekhan bullish on Mahindra and Mahindra has recommended buy rating on the stock with a target price of Rs 1075 in its research report dated September 14, 2018.
Sharekhan's research report on Mahindra and Mahindra
M&M has raised the ante in the new utility vehicle (UV) launches, with plans to launch three products in the space. Of these, two launches would be in white spaces (where M&M has no presence), leading to market share gains. The company recently launched Marazzo MPV (priced Rs. 9.99 lakh), marking its entry in the MPV space. The company will also enter the compact UV space with the launch of S201 UV in Q4FY2019 (based on the highly successful Korean subsidiary ‘Tivoli’ platform). Further, M&M would launch the nine-seater XUV7OO (extended version of XUV5OO in the premium UV category) in October 2018. Between the three new models, M&M is aiming to garner volumes of 9,000 units/month compared to the UV industry’s size of about 80,000 units. Launches in new areas will enable M&M to outpace the industry. We are factoring at least 3-4% market share regain by M&M. M&M’s market share has nose-dived to ~25% (Q4FY2018) from ~40% (FY2016). The new launches will enable M&M to recoup its market position to a certain extent.
We retain Buy recommendation on M&M with a revised PT of Rs 1075. M&M remains our preferred pick in the auto segment.
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