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 .

Buy Infosys Technologies; target of Rs 3500: PINC Research

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Infosys reported another strong set of quarterly numbers, led by robust volume growth and uptick in onsite pricing. Management raised its FY11 USD revenue growth guidance to 24-25%YoY (from 19-21%YoY previously) validating the confidence in the demand environment, which would underpin growth going forward.?

?Infosys revenues grew 12.1%QoQ to Rs 69470 million whereas USD revenue rose 10.2%QoQ to USD 1496 million. EBIT margin improved 190bpsQoQ to 30.2% led by cross currency movement and higher utilisation. Infosys reported EPS of Rs 30.4 (up 16.8%QoQ). US saw 7.7%QoQ growth, Europe surprised positively; recording growth of 18.3%QoQ and India grew 36%QoQ. This demonstrates strength in the demand environment globally. Among verticals, BFSI grew 8%QoQ, retail surged 20.2%QoQ, and telecom and manufacturing which were struggling in the past rose 3.9%QoQ and 6.8%QoQ respectively. Infosys won nine large outsourcing deals in H1, of which a few are more than USD100mn. It has a strong deal pipeline of large transformational deals. Its top 10 clients grew 12.7%QoQ.?

?Increase in USD revenue guidance includes outperformance of this quarter but implied Q4FY11 revenue growth guidance appears muted at 1.4%QoQ. Management has raised its hiring target to 40,000 employees, which reflects the confidence in the demand environment. Infosys is expected to outperform its EBIT margin guidance of 130bpsYoY for FY11. We raise our EPS estimates by 0.5% and 2.9% for FY11 and FY12. We maintain our Buy recommendation with a target price of Rs 3500 based on 23x FY12E

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