Buy Large Cap Auto Stock, Rallies 3.77%, Jumps 204.84% In 3 Yrs, Board Recommends 325% Dividend

Mahindra & Mahindra Ltd. (M&M), an automobile sector firm, get a Buy rating from ICICI Direct with a target price of Rs. 1,600/share. According to the brokerage's given target price, the stock of M&M has the potential to give decent gains of up to 21% if purchased at the current market price. It is a large cap stock with a market capitalisation of Rs. 1,65,408 crore.

The company in their Board meeting held on Friday, May 26, 2023, recommended a Dividend of Rs.16.25 per Equity Share i.e. 325% of the face value of Rs.5 each.

Recommended 325% Dividend

In an exchange filing the Board of Directors of Mahindra & Mahindra Ltd. said, "Recommendation of a Dividend of Rs.16.25 (325%) per Ordinary (Equity) Share of the face value of Rs.5 each."

Q4FY23 Results

According to brokerage, The company posted steady Q4FY23 results. Standalone net sales rose 4.2% QoQ to Rs. 22,571 crore. EBITDA margins were at 12.4%, down 60 bps QoQ. Standalone PAT for Q4FY23 came in at Rs. 1,549 crore, up 1.4% QoQ. PAT performance was dragged by impairment on certain long-term investments.

Stock to buy For A Target price of Rs 1,600/share

ICICI Direct said, "M&M's stock price has grown at ~8% CAGR from ~Rs. 857 levels in May 2018, outperforming the wider Nifty Auto index. We retain BUY tracking robust response to new launches in the SUV space with resultant order backlog of ~2.9+ lakh units and consequent increase in capacity in phased manner, focus on market share gains in tractor domain with series of new launches, amid persistent focus on capital efficiency. Revising our estimates, we value M&M at SOTP-based TP of Rs. 1,600 (8x FY25E standalone EV/EBITDA; 40% hold company discount to investments, Rs. 218/share value accrued pursuant to equity raise for electric PV arm)."

Stock Outllok

On Monday, share price of M&M last traded at Rs. 1,330.15/share, up 3.77% from its previous close of Rs. 1,281.85/share. Its 52 week high is Rs. 1,397/shre recorded on 16 February 2023 and 52 week low is 914.80/share recorded on 26 May 2022, respectively.
The stock jumped 5.1% in the past 1 week , whereas, it jumped 8.42% in 1 month. In surged 39.6% in 1 year. It gave a strong 204.84% retrun in 3 years. In 5 years, it gave 52.85% positive return.

About - Mahindra & Mahindra Ltd. (M&M)

Mahindra & Mahindra (M&M) is a conglomerate with a presence in auto, IT, financial services, logistics, hospitality and real estate among others. At standalone level it is India's largest tractor manufacturer (41.2% FY23 market share) & second largest CV, fourth largest PV maker (25.8%, 9.2% FY23 market share). FY23 standalone revenue mix - ~69% automotive, ~28% tractors.

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.