Emkay's research report on M&MCompany to raise prices for larger SUVs Bolero, Scorpio, XUV500 by 4%, TUV300 by 2.5% and KUV100 by ~1.7% (blended) to pass on the impact of infrastructure cess. Expects UV price hike to somewhat impact demand; despite slew of announcements for rural economy, tractor demand revival is still very dependent on good monsoons. Importantly, amidst the hike in prices owing to the infrastructure cess, the company said it will find it difficult to pass on the impact of the end of excise benefits at its Haridwar plant; this could impact OPM by upto ~100 bps. We lower our UV volume estimates and factor in lower margins leading to a 7%/6% cut in Standalone earnings estimates for FY17/FY18E. Retain ACCUMULATE with a lower TP of Rs 1,250 vs (Rs 1,310 earlier). We lower our estimates for utility vehicle sales for FY17/FY18E by 2% each to factor in some impact of price hike on demand. Moreover, we reduce our OPM estimates to factor in the negative impact of expiration of excise benefits at the Haridwar plant. Consequently our FY17/FY18E Standalone EPS estimates are being reduced by 7%/6%. We lower our Dec ’17 based SOTP TP from Rs 1,310 to Rs 1,250. For all recommendations, click here 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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