Buy Mahindra & Mahindra, target price Rs 1000: ICICI Direct

ICICI Direct has buy call on Mahindra & Mahindra with a target price of Rs 1000. The current market price of Mahindra & Mahindra Ltd. is Rs 776.75. Time period given by analyst is one year when Mahindra & Mahindra Ltd. price can reach defined target.

Mahindra & Mahindra Ltd., incorporated in the year 1945, is a Large Cap company (having a market cap of Rs 97422.78 Crore) operating in Auto sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 21770.81 Crore, down -.44 % from last quarter Total Income of Rs 21867.78 Crore and up 6.20 % from last year same quarter Total Income of Rs 20499.55 Crore. Company reported net profit after tax of Rs 797.23 Crore in latest quarter.


Investment Rationale
M&M is expected to be among the better OEM pack performers in Q1FY22 on the back of a sequential increase in tractor volumes (up 6.4% QoQ to 99,929 units). Automotive volumes declined 19.8% QoQ to 86,848 units. Resulting net standalone sales are expected at | 12,385 crore, down 8.3% QoQ (total volume decline at 7.6% to 1.87 lakh units). Better product mix (tractor volumes at 54% of overall vs. 46% in Q4FY21) is seen leading to relatively limited margin decline (down 190 bps QoQ to 11.3%), with consequent PAT expected at Rs 768 crore (vs.Rs 48 crore in Q4FY21)

Promoter/FII Holdings
Promoters held 18.9 per cent stake in the company as of March 31, 2021, while FIIs held 44.7 per cent, DIIs 26.8 per cent and public and others 9.6 per cent.