Buy Mahindra CIE Automotive with a 12-month target at Rs 280

Systematix Institutional Equities recommends buy rating on Mahindra CIE Automotive post March quarter results with a 12-month target price of Rs 280.

Mahindra CIE (MCIE) reported 1QCY16 results which were above street expectations on margin improvement at both Indian and European entities. Significant cost cutting efforts in Indian operation and superior performance of non-German European entities have improved consolidated EBITDA margin by 270bps QoQ to 10.7 per cent.

"Our investment views remain intact, with new meaningful margin bump expected in 2HCY16. We believe there are multiple earnings growth catalysts in the medium term along with embedded option value. We maintain a Buy rating with a target price of Rs280," said the brokerage report.