Maintain 'buy' on Mahindra & Mahindra (M&M) - TP Rs.1100 - Geojit BNP Paribas Financial Services

- Buy rating on M&M is retained with a target price of Rs.1100. The stock is currently traded in the range of Rs.885.

- Company's 3QFY13 earnings missed analysts' estimates with weaker than expected performance of the automotive business.

- However, the performance of the tractor business remained stable and the performance of combined M&M and MVML (Mahindra Vehicle Manufacturers Ltd) business was encouraging.

- The overall volume growth outlook for M&M is better than its peers and also sees scope for margin improvement in FY14 if monsoons are favorable, which may lead to a revival in pent- up demand for tractors.

- Any increase in rural outlays in the coming Union Budget would strengthen this positive outlook.

- Buy rating is retained with a lower target price of Rs.1100 as against the earlier target of Rs.1130.

- TP is lowered to factor in the 2% cut in earnings estimate for FY14 and FY15.

- Any sharp decline in consumer confidence, legislative changes for the worse, a lower rural outlay in the union Budget and an unfavorable monsoon are risks to the target price.

Source : Equity Bulls

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