Expect better-than expected EBITDA from M&M; target Rs 800: Rajesh Jain

In a chat with ET Now, Rajesh Jain, market strategist, talks about the outlook of M&M.

You have a buy call on M&M with the target of Rs 800. What are your expectations of the results from M&M?

I expect M&M to give a better EBITDA performance compared to the other auto sector numbers so far. The reason I like Mahindra & Mahindra is that on a relative basis within the auto space, this is one stock which has still got safer and better headroom for ticker appreciation simply because of its product diversification. It has got tremendous traction in the agri rural space which is where further growth will come from. The downside from the car venture with Renault is already behind the company. A scooter venture is about to get the critical mass and the brand is getting slowly established and should go forward given the strong traction in the two-wheeler industry in general.

We like the forays that the company is making overseas and on a top line to bottom line relative basis, Mahindra has the best potential to go forward. The company has also done some excellent backward integration with the likes of Punjab Tractors and Swaraj Engines. These are additional strategic upsides that the stock has resident within it and should unlock hidden value. The stock should give a better than sector appreciation for investors to a target of about Rs 800.