Buy Mahindra & Mahindra, target price Rs 3,262: LKP Securities 

LKP Securities has a buy call on Mahindra & Mahindra Ltd. with a target price of Rs 3,262. The current market price of Mahindra & Mahindra is Rs 2814.1. Time period given by analyst is a year when Mahindra & Mahindra Ltd. price can reach the defined target. Mahindra & Mahindra, incorporated in 1945, is a Large Cap company with a market cap of Rs 349555.95 crore, operating in the Auto sector.

Mahindra & Mahindra’s 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-2024.

Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 38582.96 Crore, up 2.54 % from last quarter Total Income of Rs 37626.49 Crore and up 10.15 % from last year same quarter Total Income of Rs 35027.23 Crore. Company has reported net profit after tax of Rs 2894.71 Crore in latest quarter.

Investment Rationale
LKP Securities expects M&M to continue to outperform industry growth across automotive and tractor segments including domestic PV and CV segments given successful newer launches and strong brand equity. The tractor segment is expected to witness uptick during 2HFY25E, driven by a favorable monsoon and higher reservoir levels. M&M continues to execute well by maintaining leadership position in all three segments, improved return ratio as well as cash flow generation and well-preparedness for an EV transition. The brokerage retains a BUY with a target price of Rs 3,128. (The standalone business is value stands at Rs 2,812 @21x FY26E earnings , while the subsidiaries are valued at Rs 450).

Promoter/FII Holdings
Promoters held 18.54 per cent stake in the company as of 30-Sep-2024, while FIIs owned 41.18 per cent, DIIs 26.91 per cent.

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