Buy Mahindra and Mahindra; target of Rs 824: Emkay Global Financial
Emkay Global Financial is bullish on Mahindra and Mahindra has recommended buy rating on the stock with a target price of Rs 824 in its research report dated January 01, 2021.
January 14, 2021 / 08:52 PM IST
Emkay Global Financial's report on Mahindra and Mahindra
Management has re-emphasized focus on stringent capital allocation with the cancellation of a proposed JV with Ford due to the requirement of higher-than-planned investments and the possibility of a longer time period to achieve desired ROE of 18%. Efforts continue towards the sale of a majority stake in Ssangyong, and talks have commenced with a potential buyer. In the event of failure of divestment process, bankruptcy process would commence. To strengthen position in UVs, two new platforms are planned. In addition, MM is exploring alliance with Ford on joint product development for two new products - B and C segment SUVs. Efforts will also continue on new product launches in the EV space.
We retain positive view on management’s efforts to tighten capital allocation norms and expectations of sales cycle recovery. Maintain Buy with a TP of Rs824 (Rs783 earlier), based on 17x Core P/E on FY23E and value of investments at Rs249/sh (Rs208 earlier).
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