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Home News Mahindra & Mahindra shares can give up to 23% returns despite correction

Mahindra & Mahindra shares can give up to 23% returns despite correction

 

According to ICICI Securities, a domestic brokerage firm, “fears of an El Nino impact on tractor demand in FY24” have led to a 20% decline in shares of Mahindra & Mahindra over the past few months. to “Buy” and raising its target price to 1,386 cents per share.

“We upgrade M&M to buy from Ed.” read the note. M&M currently trades at 12.5 times FY25E core EPS, compared to the long-term mean multiple of 15 times, after accounting for the recent correction and decrease in tractor volumes.” However, doing business

The financier has cut its FY24E income/PAT gauges to 9 percent/14 percent and has comparatively decreased its TP to 8 percent. 1,386, or 16 times Core EPS for FY24E.

The quantity of tractor has decreased by an average of 12% over the past 15 years during each of the four El Nino events. Subsequently, we are working for a 12 percent farm truck volume decline for M&M in FY24 as against our previous gauge of 6% development,” ICICI Protections said.

on suv

Even though the XUV700’s waiting period has decreased for SUVs, brokerage reports indicate that overall monthly retail prices have largely remained the same over the past four to six months.

Due to an increase in the cancellation rate, ICICI Securities believes that the average waiting period for the XUV700 has decreased to two to three months, down from six to twelve months in H1FY23.

The waiting period is more than a year for other flagship models like the Scorpio N and Thar rear-wheel drive.

“We are looking at manufacturing 35k units/SUV in FY24, with the XUV400 and Thar RWD yet to be delivered in comparison to the current monthly wholesale numbers of 30-32k units. The brokerage expects to acquire M&M 25 billion cash in FY 24-25E, resulting from stake sale in its EV arms, thereby contributing to better FCF, with budgeted capex + investments remaining unchanged. Since FES segment EBITM for M&M in the past has been sticky in nature and largely independent of volume volatility, we are looking at generating 17.5 percent EBITM in FY24E. 50 billion annually.

On Wednesday, M&M shares closed at Rs. 1,145.85, up 1.56%.

The opinions and suggestions presented above are those of individual analysts or brokerage firms and not those of 02help.

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