Add Mahindra & Mahindra, target price Rs 913: ICICI Securities

ICICI Securities has add call on Mahindra & Mahindra Ltd. with a target price of Rs 913. The current market price of Mahindra & Mahindra is Rs 848.55. Time period given by analyst is year when Mahindra & Mahindra price can reach defined target.

Mahindra & Mahindra Ltd., incorporated in the year 1945, is a Large Cap company (having a market cap of Rs 104763.84 Crore) operating in Auto sector.

Mahindra & Mahindra Ltd. key Products/Revenue Segments include Automobile-Light, Medium & Heavy Commercial, Jeep, Passenger Car, Sale of services, Other Operating Revenue for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 23785.49 Crore, up 9.43 % from last quarter Total Income of Rs 21735.96 Crore and up 8.77 % from last year same quarter Total Income of Rs 21867.78 Crore. Company reported net profit after tax of Rs 2066.60 Crore in latest quarter.

Investment Rationale
Mahindra & Mahindra’s (M&M) Q3FY22 EBITDA margin came in at 11.9% (down 40bps QoQ) despite blended ASP rise of 2% QoQ. Drop in margin was primarily due to gross margin compression (down 201bps QoQ) in sync with other auto makers. Order backlog continues to be elevated at >155k with XUV700 leading with >70k bookings (net of cancellations). Profitability for FES subs is also improving on a sustained basis with market share gains across geographies. Success of the recent launches coupled with production ramp-up as the supply chain situation eases, is aiding aggressive market share gains in core-SUV segment. Management’s focus remains on creating a diverse EV portfolio with 17 new products (FY24 onwards) including LCVs/3Ws other than SUVs. M&M is also open for value unlocking in the EV space by getting a strategic partner and funds to grow and/or invest.

Promoter/FII Holdings
Promoters held 19.47 per cent stake in the company as of 31-Dec-2021, while FIIs owned 44.36 per cent, DIIs 22.11 per cent.