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Mahindra & Mahindra : Long Term Stock Pick


Mahindra & Mahindra - one of the leading Automobile Manufacturers not only in India but World is our Long Term Stock Pick. Buy it for a target of 50% appreciation in coming 2 years

 

 

M&M is on a fast track growth. The company is expanding its dealer network and also the product mix - been the SUV King - from Quanto, Xylo, Scorpio and XUV 500 - Mahindra is coming with Ssangyong Rexton in 2.5 Litre Diesel Engine in 20 Lakh price segment to challenge the leader Fortuner.

XUV 500 despite of series of price hike is a wonder for M&M with huge demand and orders piled up. Quanto with its aggressive pricing will also be one of the major game changers for Entry Level SUV.

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M&M has already been showing consistent growth and has now become the 3rd largest passenger car aker in India by surpassing Tata Motors this September. Moreover- the Automotive division including tractors has shown a cumulative highest ever sales in Sep 2012 with impressive performance which was a lean month with all manufacturers Mahindra, Maruti, Nissan and Renault showing degrowth

Financials & Stock Price

The stock is trading near to its 52 week high with last closing price at 860 Rs. - With EPS of 50 and further growth @ 15% for next 2 years ,current Industry P/e at 19 and expected to grow to 20 with Mahindra to show growth. At P/e of 20 - the fair value becomes around Rs. 1300 in next 2 years

Mahindra has also been increasing prices of there passenger cars - without having any impact on the sales

Moreover the Ssangyong Acquisition will help M&M the technology and an opportunity to enter in premium segment SUV + lower costing with joint synergy with Ssangyong.

If the fundamentals are strong and company on an expansion mode - no matter what - the stock is always good to buy, Recommended a strong buy in Mahindra & Mahindra for medium term perspective

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Wednesday, 05 August 2020

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