After the quarterly results, most of the brokerage houses are positive about the M&M stock and are advising to invest. He says that the new products launched by the company will be rewarded.
Auto Sector Stock: Today, a mixed trend is being seen in the shares of auto sector giant Mahindra & Mahindra. While the stock was bullish in the initial trade, now it is trading in the red mark. However, the company’s profit in the December quarter increased by 155 percent to Rs 1353 crore. The company’s revenue has also increased by more than 8 percent to Rs 15,238.82 crore in the December quarter. After the quarterly results, most of the brokerage houses are positive about the stock and are advising to invest. He says that the new products launched by the company will benefit. At the same time, the problem of supply chain is now gradually reducing. The company’s auto business is strong.
New product is getting success
Brokerage house ICICI Securities says that even after Blended ASP grew 2 per cent on a quarterly basis, M&M’s Q3FY22 EBITDA margin declined 40bps to 11.9 per cent on a quarterly basis. Margins have come down due to gross margin compression. The order backlog is continuously decreasing. The products that the company has recently launched have been successful. The supply chain situation is now normal. The company is increasing the market share in the core SUV segment. Management’s focus is on the divers EV portfolio. The company will get the benefit of focusing in the EV space. The brokerage house has advised to add the stock to the portfolio and has given a target of Rs 913. The stock had closed at Rs 853 on Thursday.
Strong recovery in auto business
Brokerage house Motilal Oswal says that the operating performance of M&M in 3QFY22 has been as per expectations. There has been a strong recovery in the auto business, although there is concern about the tractor segment. Going forward, the auto business can further strengthen the overall growth. Momentum has been maintained in SUVs due to new product launches and reduced supply issues and cyclical recovery in LCVs. The brokerage has given a target of Rs 1125 while advising to buy in the stock. According to the report, the stock is still trading at attractive valuations. Management says that the bad tour has passed. Better growth is expected going forward. 300bp increase in auto business margin can be seen. However, some concerns remain in the tractor industry and volumes may decline by 6 per cent in the current financial year.
Veteran brokerage also positive
Veteran brokerage houses are also positive on M&M’s stock. The plan to launch the SUV in the EV version will also benefit further. The brokerage house CLSA has given a target of Rs 1220 while advising to buy in the stock. Brokerage house Morgan Stanley is overweight on the stock and has given a target of Rs 1117. Although Bank of America has given a neutral rating to the target of Rs 920.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.
,