Mahindra and Mahindra (M&M) is trading higher by almost 3% at Rs 880, also its record high in otherwise weak market after reporting 22% year-on-year (yoy) growth in net profit at Rs 902 crore in September 2012 quarter as compared to market expectation of Rs 802 crore on back of strong automotive sales growth and higher other income. The stock has rallied 6.3% in past two trading sessions against a marginal 0.34% fall in benchmark Sensex.
“Higher other income, better-than-expected 11.4% EBITDA margin and blended realizations increasing 21% resulted in M&M’s 2QFY13 results beating expectations,” Rohan Korde of Anand Rathi Research said.
“We see improving visibility of earnings growth in both auto and farm equipment segments of the company. The low base effect in tractor business in H2 (October-March) also provides cushion against any strong volume dip,” said analyst at ICICI Securities in report. Analyst recommends BUY on the stock with target price of Rs 980 per share.
The stock opened at Rs 859 and has seen a combined 1.47 million shares changing hands on the counter so far on the NSE and BSE.
