Maintain M&M neutral with target Rs 1,286: Motilal Oswal

By: | Updated: December 3, 2015 7:33 AM

November-15 volumes grew 28% y-o-y to ~63,307 units (v/s est 65,528 units), driven by ~25% y-o-y growth in UVs and ~42% growth in tractors.

BSE Sensex, NSE Nifty, bse, nseNovember-15 volumes grew 28% y-o-y to ~63,307 units (v/s est 65,528 units), driven by ~25% y-o-y growth in UVs and ~42% growth in tractors.

November-15 volumes grew 28% y-o-y to ~63,307 units (v/s est 65,528 units), driven by ~25% y-o-y growth in UVs and ~42% growth in tractors. We estimate growth of ~4.5% in FY16, implying 22% residual growth or ~64,284 units.Tractor volumes grew, after 13 months of YoY decline, by 42% YoY to 21,717 units (v/sest 19,166 units), on low base of last year. MM’s tractor business has favorable base from Nov-14, resulting in strong growth in 2HFY16. We are assuming 4% de-growth in volumes for FY16, implying a residual growth of ~32% or 16,816 units.

Speaking on the monthly performance, Pravin Shah, chief executive, automotive division, M&M, said, “The festive season coupled with new product launches as well as moderation in interest rates has seen the auto industry post a positive growth during the last couple of months. I believe speedy implementation of GST will help and have long term impact on the competitiveness of the auto industry. At Mahindra, we have been buoyed by our new product launches such as TUV3OO as well as growth momentum of existing products like the Bolero, Scorpio and XUV5OO. Our exports have been very encouraging, showing a 28% cumulative growth fir the current fiscal. We are happy to be in a positive growth phase at the end of November 2015.”

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