Mahindra & Mahindra (MAHMAH)
Price: Rs 777 Target Price: Rs 990
Mahindra & Mahindra (M&M) is the flagship of the Mahindra Group. It has two
main operating divisions. The auto division manufactures utility vehicles
(UVs), light commercial vehicles (LCVs) and three-wheelers. The tractor
division makes agricultural tractors and related implements. Other entities,
spun-off into separate business groups, include hospitality, trade and
financial services, auto components, IT, telecom and infrastructure
development.
At the current price of Rs 777, the stock is attractively valued at 18.5x
FY07E and 16.9x FY08E EPS. With new launches, rapidly growing core business,
acquisition synergies and boost from its holdings in subsidiaries, the
prospects of the company look promising. We expect the stock to touch around
Rs 990, with its holdings in subsidiary companies valued at around Rs 438
per share.
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