Buy Mahindra and Mahindra; target of Rs 831: PINC Research

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Mahindra and Mahindra (M&M), with a major rural presence, is expected to benefit from strong monsoons this year. The automobile segment is expected to record volume growth of 20.8% in FY11, after an impressive 30% growth in FY10. The tractor segment is expected to grow 10.3% in FY11, due to increased demand from the construction and infrastructure sectors.?

?Mahindra and Mahindra will move on this key 1) Ssangyong, Korea, has selected M&M as a preferred bidder. The acquisition would provide M&M a 2-3 year leap in terms of product development. Financial details on the transaction are awaited. 2) Production for the JV with Navistar has begun at the Chakan plant. 3) M&M has received EPA approval for launch in the US. 3) There is strong demand for small commercial vehicles (SCVs), the fastest-growing CV segment, which M&M recently entered into with the launch of Maximmo and Gio. 4) The company is expected to roll out expansion plans to ramp up capacity given current growth in the tractor segment.?

?We expect EPS of Rs 39.6 and Rs 43.7 in FY11 and FY12 respectively. Our FY11 earnings estimate is 3.3% lower than consensus estimate of Rs 40.9. We value M&M using SOTP at Rs 831, discounting the standalone business at 14x FY12E earnings,".@Supernsetips.com provide you the 99% sure shot stock market tips .