CLSA on M&M ; High Conviction O-P, TP Rs 4650

(M&M) farm EBIT margin came in at 16.8% (-176bps QoQ), while auto EBIT margin came in at 7.7% (+58bps QoQ), largely in line with M&M remains top auto pick, backed by: sustained UV market share gains driven by strong execution and upcoming launches, strong traction in BEVs, ongoing capacity expansion to support demand & attractive valuation M&M is currently trading at a 15x FY28CL EPS vs a 10-year average PE of 17x, with far superior fundamental execution Farm segment contributes 30% of FY28CL EBIT & thus, a ±5% swing in tractor volume would have a less than 2% impact on SOTP. Therefore, believe weak sentiment driven by concern over tractor volume growth is overdone.

MAHINDRA & MAHINDRA LTD

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