Brokerages up M&M target price

Mumbai: Brokerages have raised target prices on Mahindra & Mahindra after the company reported operationally strong results for the March quarter.

“M&M’s 4QFY20 standalone (M&M+ MVML) EBITDA at 12.3 billion was ahead of estimates on the back of improved gross margins driven by higher share of farm equipment division revenues,” said Antique Stock Broking. Emkay has raised target price to 572 from 490. Prabhudas Lilladher has raised target price to 498 from 420. HDFC Securities has raised target price to 520 from 410. Elara has raised target price to 543 from 418.

Kotak Institutional Equities has maintained ‘buy’ rating on M&M and raised target price to 640 from 625. The brokerage expects the near term to remain challenging for the auto business given uncertainties related to Covid-19. It expects tractor demand to recover as rural economy remains strong on the back of record rabi output, higher government spending and expectations of a normal monsoon. The focus on tightening capital allocation norms could lead to re-rating of the stock, it said.