Mahindra and Mahindra (M&M) share price likely to react on February 13 to its December quarter earnings and and stake sale in Mahindra Consulting Engineers.
Mahindra and Mahindra has entered into a share-purchase agreement with Artelia Holding SAS for the sale of its entire stake in Mahindra Consulting Engineers Limited (MCEL), a subsidiary of the company i.e. 60.88 percent of the paid-up equity share capital of MCEL, comprising 11,51,000 equity shares of Rs 10 each to Artelia, in one or more tranches at a price of Rs 89.66 per share for an aggregate consideration of Rs 10,31,98,660, as per company's press release.
After the stake sale, MCEL will cease to be the subsidiary of the company. And, consequent to above, Mahindra Namaste, a wholly owned subsidiary of MCEL, would also cease to be a subsidiary of the company.
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The company, on February 10 reported a 13.5 percent jump in its standalone net profit at Rs 1,528 crore during the third quarter of FY 2023, up from Rs 1,335 crore in the same quarter of the previous fiscal.
The company's revenue from operations was up 41 percent at Rs 21,654 crore from Rs 15,349 crore during the quarter ended December.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were up 56 percent at Rs 2,814 crore from Rs 1,803 crore and the margin was up at 13 percent.
Here is what brokerages have to say about stock and the company after December quarter earnings:
Morgan Stanley
The research firm has kept 'overweight' rating on the stock amid strong execution and EV focus. The target is at Rs 1,472 per share.
The company delivered well on market share, ROE expansion and shareholder value creation. There are no near-term catalysts, reported CNBC-TV18.
Nomura
The brokerage house has maintained 'buy' call on the stock with a target price at Rs 1,718 per share.
The third quarter was in-line, consistently delivers EPS growth and RoE targets. Future EVs are very promising with SUVs & farm implements to be high growth segments.
The EVs are very impressive with attractive designs and next generation of tech. Positive on farm implements and investments in ‘growth gems’, reported CNBC-TV18.
JPMorgan
The broking firm has kept the 'overweight' rating on the stock with a target at Rs 1,520 per share.
The Q3 results were broadly in-line with estimates. The headline EBITDA beat driven by other segments, while auto+Farm EBIT was in-line. The auto segment margin surprised positively, driven by operations leverage and better ASPS.
The farm EBIT margin improvement is slower-than-expected but better than peer Escorts.
The management highlighted further upside from its growth gems in coming quarters, reported CNBC-TV18.
Goldman Sachs
The research house has maintained the 'buy' call on the stock with a target of Rs 1,600 per share. The company has reported an in-line Q3.
Expect operation leverage and price hikes on high ASP products to support margin trajectory. There could be some offsets from higher EV sales and farm implement sales.
The management expects supply of Scorpio-N aggregate components to improve starting end February.
The company sees next set of growth opportunities in electric three-wheelers, farm implements and better management of captive financing and it services verticals, reported CNBC-TV18.
CLSA
The brokerage firm has downgraded the stock to 'outperform' from 'buy' as the company has seen a sharp run-up YTD. The target kept at Rs 1,583 per share.
The Q3 was marginally below expectations due to lower than expected tractor EBIT margin. The automotive business continued to perform well. The SUV order book increased marginally to 2.66 lakh units.
Expect volume growth for both SUVs & tractors, reported CNBC-TV18.
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