Buy Mahindra & Mahindra, target price Rs 1513: LKP Securities

LKP Securities has buy call on Mahindra & Mahindra with a target price of Rs 1513. The current market price of Mahindra & Mahindra is Rs 1287.15.

Mahindra & Mahindra Ltd., incorporated in the year 1945, is a Large Cap company (having a market cap of Rs 160011.31 Crore) operating in Auto sector.

Mahindra & Mahindra Ltd. key Products/Revenue Segments include Automobile-Light, Medium & Heavy Commercial, Jeep, Passenger Car, Sale of services, Scrap, Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 30076.98 Crore, up 5.06 % from last quarter Total Income of Rs 28628.39 Crore and up 38.37 % from last year same quarter Total Income of Rs 21735.96 Crore. Company reported net profit after tax of Rs 2585.85 Crore in latest quarter.


Investment Rationale
The brokerage maintains BUY on attractive valuations; SOTP-based target price stands at ₹1,513 (₹1,203 core business valued at 14x FY 24E earnings + subsidiary valuation of ₹310) in line with assumptions of margin improvement on increase in volumes and value of SUV, 3Ws and LCV segments, decent growth in FES, impact of softening input costs from Q3, production increase offering operating leverage, price hikes (3% in FES and 1.5-2% in Auto in H1 FY23) and prudent cost reduction measures.

Promoter/FII Holdings
Promoters held 19.38 per cent stake in the company as of 30-Sep-2022, while FIIs owned 43.61 per cent, DIIs 28.39 per cent.