Mahindra & Mahindra - August 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 ~46k units (up 21.6% YoY, down 2.6% MoM) which was in line with our expectation.

- We expect growth to continue as we enter into the festive season from this month. Launch of Quanto in Septmber should also boost sales.

Tractor segment

- Domestic sales at 12.4k units (down 17.7% YoY and 20% MoM) disappointed since it was lower than our expectation of ~14.3k units.

- Tractor sales year till month down 4%. We expect weakness to continue going forward. Our full year tractor sales expectation is a decline of 8%.

- Ssangyong again reported low numbers at 9,064 units (down 10.3% YoY and 6.3% MoM).

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

Source : Equity Bulls

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