Buy M&M - September 2012 Sales Update - Edelweiss

Mahindra & Mahindra (MM IN, BUY, TP: INR839)

Auto segment

- Higher UV and four-wheeler pick up led growth, resulting in total automotive sales of ~48k units (up 9.5% YoY and 5.5% MoM), in line with our expectations.

- We expect growth to continue as we enter the festive season along with new launches (Quanto etc).

Tractor segment

- Domestic sales at 18.9k units (down 19.6% YoY, up 52.6% MoM) were significantly ahead of our expectation of ~14.3k units. This was likely due to early sales push before the festival season.

- Tractor sales year till month dipped ~7%. We expect weakness to continue going forward. Our full year tractor sales expectation is a decline of 8%.

- We have a 'BUY' recommendation on the stock with a TP of INR839.

Source : Equity Bulls

Keywords