Motilal Oswal neutral on Mahindra and Mahindra

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Mahindra and MahindraAugust-15 volumes de-grew by 6% YoY to ~47,333 units (v/s est 51,817 units), impacted by ~22% YoY de-growth in tractors and ~10% de-growth in 3Ws. We estimate growth of ~11% in FY16, implying 24% residual growth or ~72,070 units.Tractor volumes declined by 22% YoY to 11,699 units (v/s est 13,881 units). We are assuming 4.5% growth in volumes for FY16, implying a residual growth of ~22% or 22,148 units.UV (incl pick-ups) grew by ~3% YoY to 29,767 units (v/s est 31,924 units). We estimate 15% growth in FY16 for UVs driven by new product launches (3 new platforms and 3 major upgrades), implying residual monthly run-rate of 43,539 units.Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, M&M. said, "While currently we are witnessing fragmented recovery in auto sales, we are hopeful that the upcoming festive season will provide a much needed fillip to the auto industry. Our export sales have grown with a record high of 73% compared to previous year. Overall we have had a positive month and the launch of new models is expected to further improve overall performance. At Mahindra, we are gearing up for an exciting launch for our forthcoming TUV300”Commenting on the monthly performance, Rajesh Jejurikar, President & Chief Executive, Farm Equipment and Two Wheeler Division, Mahindra & Mahindra Ltd. said, "We sold 10,751 tractors in the domestic market during August 2015. While monsoon has reported 12% deficient so far, we are hopeful that improved rainfall in the remaining period would infuse positive sentiment for the coming season. In export markets, we sold 948 tractors."While tractor is undergoing cyclical pressure, UV business is witnessing structural challenges. Based on our current estimates, the stock trades at 18x/14.3x FY16E/17E consolidated EPS. Maintain Neutral.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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