Motilal Oswal is bullish on Mahindra & Mahindra has recommended buy rating on the stock with a target price of Rs 1546 in its research report dated March 22, 2017.
Motilal Oswal's report on Mahindra & Mahindra
M&M is the best play among key auto OEMs on the rural market recovery, with highest revenue contribution from rural markets. For M&M, rural market contributes 56% to revenues, 77% to S/A PAT and 75% to SOTP. We expect rural markets to fully recover from impact of demonetization from 1QFY18 onwards.
Outlook
M&M is one of the cheapest large cap auto stock with valuations of 17x/14.2x FY18/19E consol EPS and 15.2x/12.8x on core PE basis (adj for value in subs after 20% Holdco discount). Maintain Buy with TP of INR 1,546 (FY19 SOTP based).
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