Buy Mahindra & Mahindra; target Rs 1018: Firstcall Research
Brokerage house Firstcall Research is bullish on Mahindra and Mahindra (M&M) and has recommended buy rating on the stock with a target price of Rs 1018 in its November 14, 2013 research report.
November 20, 2013 / 14:06 IST
Firstcall Research report on Mahindra and Mahindra (M&M)
"The Gross Revenues and Other Income of Mahindra & Mahindra for the quarter ended 30th September 2013 is Rs. 98906.10 million as against Rs. 108913.5 million in the corresponding period last year. The profit after tax for the quarter is Rs. 9895.00 million as against Rs. 9018.00 million in Q2 FY13 – a growth of 9.7 percent. Mahindra Vehicle Manufacturers Ltd (MVML) is a 100 percent subsidiary of the company with a view to sourcing contemporary products for expanding the market offerings of the company.""The Gross Revenues and Other Income of Mahindra & Mahindra Ltd and MVML (Entity) for the quarter ended 30th September 2013 is Rs. 98876.00 million as against Rs. 107867.00 million during the corresponding period last year. The profit before tax of Entity for the current quarter is Rs. 13036.00 million as against Rs.13272.00 million in Q2 previous year. After providing for tax, the profit is Rs. 10276.00 million against Rs. 9781.00 million in Q2 last year - a growth of 5.1 percent. The operating margin of the Entity for the current quarter is 14.5 percent as compared to 13.8 percent in Q2 last year. The deceleration in the Gross Revenues in the quarter is due to the challenging times the Indian auto industry, with volumes shrinking by 4 percent during Q2 FY14. Despite this, the entity could deliver a growth in the profits in the quarter due to a strong sales performance by its Farm Equipment Sector and a tight control on material costs and all expenses.""In the Passenger Utility Vehicle segment, the Entity sold 47388 vehicles in the current quarter with a market share of 39.6 percent. In the Cars segment, the Entity sold 2879 Verito and Verito Vibe Cars. The Entity also exported 8059 Vehicles in Q2 FY14. The domestic tractor industry continued to show robust growth with sales of 141171 tractors in Q2 FY14 against 116524 tractors sold in Q2 FY13 - a growth of 21.2 percent. In this period, the Company's domestic sales at 57549 tractors grew by 22.3 percent over the 47065 tractors sold in Q2 last year. Company's market share was 40.5 percent as against 40.2 percent in Q2 last year. Over FY2012-15E, we expect the company to post a CAGR of 15 percent and 13 percent in its top-line and bottom-line respectively. Hence, we recommend 'BUY' for 'Mahindra & Mahindra' with a target price of Rs 1018 on the stock," says Firstcall Research report.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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