Mahindra & Mahindra (M&M) rallied over 3 per cent in the early trade on Tuesday to scale Rs 1,000 mark for the first time ever. This is the second consecutive day that the shares of M&M have rallied. The stock rose more than 5 per cent in the previous session and extended its gains on Tuesday to hit an all-time peak of Rs 1,029.90.
M&M Stock Price
Shares of the company have risen about 25 per cent in the year 2021 so far, whereas the counter has more than trebled since its Covid lows. The auto stock has risen about 10 per cent in the last five trading sessions.
The company also announced that it will unveil its electric vehicle business strategy, ‘Born Electric Vision’ of EV concept in August this year. The company plans to roll out 13 SUVs by 2027 with eight of them to be electric SUVs.
The Mumbai-headquartered company has recently partnered with Volkswagen to explore the use of the latter’s modular electric drive matrix (MEB) components that can be used in its electric cars.
M&M Q4 Results
The automaker reported a five-fold jump in standalone profit at Rs 1,192 crore for its fourth quarter that ended March 31, 2022. The Mahindra Group company’s revenue grew 28 per cent to Rs 17,124 crore in the period under review as compared with Rs 13,356 crore in March quarter 2020-21.
Our performance in Q4 and FY22 underscores the resilience of our business model. Despite significant challenges due to various factors like Covid, commodity prices, semiconductor shortages and the Ukraine conflict, we have delivered strong results at the consolidated level, said Anish Shah, Managing Director and CEO, M&M.
Should you Buy, Sell or Hold?
“While the outlook for Tractors has improved, we expect the Auto business to be the key growth driver over the next couple of years. Valuations are still at a substantial discount to its five-year average, reflecting weakness in the Tractor cycle,” said Motilal Oswal in a note.
The brokerage house has maintained its Buy tag on M&M shares with a target price of Rs 1,150 apiece.
CLSA said easing commodity cost pressure will drive Mahindra & Mahindra margins. The capacity addition at M&M will meet demand, finding M&M’s growth commentary positive, said the global brokerage firm, which has a target of Rs 1,257 on the stock.
ICICI Securities said that Q4FY22 EBITDA margin dropped to 11.4 per cent on QoQ basis despite a blended ASP rise of 6 per cent. Drop in margin was primarily due to gross margin compression amidst continued RM pressures.
Success of the recent launches coupled with production ramp-up as chip-supply situation eases, to drive market share gains in core SUV segment with Scorpio Refresh to further aid demand momentum, said the Domestic brokerage firm with an ‘add’ rating and target price of Rs 953.
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