Mahindra & Mahindra Ltd., incorporated in the year 1945, is a Large Cap company (having a market cap of Rs 94265.07 Crore) operating in Auto sector.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 19368.16 Crore, down -11.04 % from last quarter Total Income of Rs 21770.81 Crore and up 17.24 % from last year same quarter Total Income of Rs 16520.12 Crore. Company reported net profit after tax of Rs -748.67 Crore in latest quarter.
Investment Rationale
The brokerage expects the Auto business to take over the growth mantle from Tractor, although deterioration in the mix would result in a lower EPS CAGR of ~18% over FY21–23E (v/s 24% earlier). MM’s valuations are still at a substantial discount to its five-year average, capturing both the pain points of deterioration in UV market share and the performance of its subsidiaries.
Implied core P/E for MM stands at 11.5x/9.9x FY22E/FY23E EPS. This implies an over 30% discount (on an FY23E basis) to its five-year average core P/E. It maintains Buy rating, with TP of INR890/share (Mar’23E SoTP), implying 12.8x core PE for FY23E.
Promoter/FII Holdings
Promoters held 18.9 per cent stake in the company as of June 30, 2021, while FIIs held 45.8 per cent, DIIs 25.4 per cent and public and other 9.9 per cent.
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