Large Numbers of Broking Houses Give Thumbs Up To M&M
Large numbers of brokerage houses informed to stay positive on auto major Mahindra & Mahindra. They cited that it is launching strong line-up of product across various segments. Soon the company is expected to launch, network strengthening measures, increased customer engagement, improving rural sentiment, and favorable macro environment. Various technical analysts explained that the stock is expected to give up to 17 percent return in next 12 months. The shares of M&M have risen 12 percent in the past one year.
On 14 March, the management has also confirmed that the company is prepared for BS-VI. The company along with compliant diesel engines to address the potential shift away from diesel is ready. In the financial year 2019, the management is expecting to regain some of its utility vehicles glory with the launch of three new models. M&M is in the process of developing high-voltage EVs. Not only the high voltage EVs but it will also be developing the longer range and higher top speeds.
In the coming years, the company is planning to launch four new models. These new models are S201 compact UV, U321 MPV, New Rexton and new Xylo. Out of this list, two models are expected to be launched before November in the volume segment. Analysts believe that this would help M&M gain market share in utility vehicles.
On the other hand, it is expected that the company’s dominance in tractors and LCVs will continue. Since the company is gaining traction in MHCVs, so it would help it in achieving Ebitda break-even in FY19. It is being forecasted that you may see a strong 18 percent EPS growth in FY19.
The shares of leading automobile manufacturer, Mahindra & Mahindra rallied more than 2 percent. The shares rallied when the research house Motilal Oswal has maintained the buy rating on the stock with a target price of Rs 889. It also implied 22 percent upside. Motilal Oswal believes that the M&M is the best player on the rural markets.
According to various other technical analysts, M&M would be one of the biggest beneficiaries of rural market recovery. This is because both of its core businesses are heavily dependent on rural markets.
The technical analysts also estimated that around 70 percent of MM’s profit can be attributed to rural markets. Today, it was observed that the Mahindra and Mahindra are clearly showing some signs of a breakout. Hence, you are recommended to keep a stop loss below Rs 740-738. It is suggested to consider the targets around Rs 780.