Buy Mahindra and Mahindra: target of Rs 872 : Sharekhan

Sharekhan's research repor on Mahindra and Mahindra

We expect M&M to benefit from leadership position in tractor segment, strengthening position in LCV segment and steady market share in UV segment. Concrete steps to achieve 18% RoE from all businesses, by exiting loss-making subsidiaries and focusing on core businesses make a case for re-rating stock. M&M attractively valued with P/E multiple of 17.7x and EV/EBITDA multiple of 9.4x its FY2023E estimates; it trades at a discount to long-term average multiples.

Outlook

We maintain a Buy on Mahindra and Mahindra (M&M) with a revised PT of Rs. 872, factoring higher multiples and higher value of subsidiaries.