Multi Baggers
M&M
BSE ID : 500520 NSE ID : M&M
RECOMMENDED PRICE 921.15
PEAK FROM RECO 1604.55 74.19%
CURRENT PRICE 2082.90 Resource id #12
The Mahindra Group is a USD 19 billion federation of companies which enjoys a leadership position in utility vehicles, information technology, financial services and vacation ownership in India and is the world`s largest tractor company, by volume. Hence, looking after strong fundamentals of company & healthy financial performance, we recommend ``Buy`` on the stock with price target of Rs. 1150(appreciation of almost 25%) for long term investment.
The Mahindra Group is a USD 19 billion federation of companies which enjoys a leadership position in utility vehicles, information technology, financial services and vacation ownership in India and is the world’s largest tractor company, by volume. It also enjoys a strong presence in agribusiness, aerospace, commercial vehicles, components, defense, logistics, real estate, renewable energy, speedboats and steel, amongst other businesses. Headquartered in India, Mahindra employs over 2,40,000 people across 100 countries.
Strong Sales Volume: M&M`s iconic SUV, the Bolero has touched a new milestone, having sold 10 lac units, since inception. The Bolero has also regained its position in the list of Top 10 Passenger Vehicles of India where it features as the third highest selling SUV in the country. Bolero has registered year-on-year growth of 23%, outperforming the industry which has witnessed 17% growth. Also Mahindra’s Scorpio registered highest ever annual sales of 53,934 nos. Co’s Pickups registered highest ever annual sales of 149,119 nos along with highest ever annual MTBD volumes at 17,228 nos. Co`s EV sales gaining momentum with annual sales @ 4026 nos.
Robust Financial Performance: Co has posted healthy financial performance in FY18 as bottomline of company has witnessed whopping growth of 100% in FY18 at Rs 7510.39 Cr as compare to Rs 3698 cr in FY17. Co`s operating & net profit margin ratio stood at 14% & 7% & has witnessed surge of 18% & 108 % respectively. Company has witnessed reduction in debt as debt/eq ratio of company has decreased from 1.57 in FY17 to 1.45 in FY18.
Focus Areas: In Automotive Sector, company focuses on strengthening UV portfolio with the launch of U321, S201 & Y400 & strengthening CV portfolio with the launch of ICV Range. Also co is looking for strengthening EV portfolio & aggressive channel & capacity expansion. In Farm Equipment Sector, co focuses on leveraging product & technology along with solution selling & building farm machinery or implementing business & establishing third brand–Gromax. With all this, company is moving towards strong future growth.
The company is currently trading at 15.25x of FY18 eps of Rs 60.41 while it is trading at 13.49x of FY19E eps & 11.85xof FY20E eps. Co has achieved highest ever auto sector global volumes of 689,358 nos in FY18.Also co has widest range of offerings & company continue to retain dominant position in some of its segment .Company has posted robust set of numbers for FY18 with whopping growth. Hence, looking after strong fundamentals of company & healthy financial performance, we recommend ``Buy`` on the stock with price target of Rs 1150(appreciation of almost 25%) for long term investment.
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Disclaimer & Disclosure: This document is prepared for our clients only, on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate, fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument and at any point should not be considered as an investment advice. Reader is requested to rely on his own decision and may take independent professional advice before investing. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited, Directors and any of its employees shall not be responsible for the content. The person accessing this information specifically agrees to exempt Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and further agrees to hold Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned herein and the same have acted upon or used the information prior to, or immediately following the publication.
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