Brokerage firm Emkay Global recommends investors to buy the stocks of Mahindra & Mahindra. The company is going to introduce a new SUV model Scorpio-N, which will open new doors for the growth of the company.
Target Price, Current Market Price
The Current Market Price (CMP) of Mahindra & Mahindra is Rs. 1,083. Emkay Global has estimated a Target Price for the stock at Rs. 1,250. This stock has the potential to give a 15.50% return, in the upcoming 1 year. This is a large-cap company with a market capitalization of around Rs. 138,243 crore.
|Current Market Price (CMP)||Rs. 1,083|
|Target Price||Rs. 1,250|
|Potential 1 year return||15.50%|
|52 week high share price||Rs. 1095|
|52 week low share price||Rs. 671|
The company's revenue in FY22 was recorded at Rs. 574,460 mn, which is expected to be at Rs. 728,218 mn in FY23. Their EBITDA in FY22 stood at Rs. 70,423 mn, which is expected to be at Rs. 91,197 mn in FY23. M&M's adj. PAT in FY22 was recorded at Rs. 37,809 mn, which is expected to be at Rs. 49,765 mn in FY23.
The company is offering a dividend yield of 1.04%.
Stock advantages and risks: Emkay Global
Mahindra & Mahindra's new auto-launch of Scorpio-N is going to be a triggering point for the stock. Emkay Global commented, "Scorpio-N is developed with an investment of Rs. 16bn and has a production capacity of 6,000 units per month. It would compete with models like Tata Safari, Toyota Innova, Hyundai Alcazar, etc. Scorpio-N manual transmission is priced competitively at Rs. 1.2-1.9mn for petrol versions and Rs. 1.25-1.95mn for diesel versions. MM's order book stands at ~170,000 units, and the Scorpio-N launch on July 30 will further support bookings."
Mentioning the stock's further potential, the brokerage firm added, "Considering expectations of a staggering improvement in chip supplies and a large order book, we raise volume estimates by ~3% each for FY23 and FY24. We increase our FY23/FY24 EPS estimates by 6% due to an increase in margin assumptions. We increase the valuation multiple to 16x from 14x, factoring in higher revenue growth and margin assumptions in our DCF model."
Mahindra & Mahindra: Company profile
Mahindra & Mahindra auto is one of the leading players in the Indian domestic markets. The company has unveiled the new Scorpio-N, which is targeted at upmarket urban customers. This model is superior to the existing Scorpio Classic in terms of power and ride handling, along with comprehensive safety/connectivity features. It has been unveiled in India, South Africa, and Nepal. It will be soon introduced in Australia and New Zealand. For Connected features, Mahindra has partnered with Amazon Alexa, what3words, Qualcomm, Visteon, Blackberry QNX, Bosch, Sony, and Amazon Web Services (AWS). The company's most popular SUV models are XUV700, XUV300, Mahindra THAR, Alturas G4, Bolero neo, and Scorpio. Apart from SUVs, the company has footprints in the segments of Pick Ups, Small Commercial cars, Electric cars, Trucks, and Buses.
The above stock was picked from the brokerage report of Emkay Global. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.