Motilal Oswal Maintains Buy on M&M

M&M: Above estimates; Strong growth in 3Ws, UVs & tractors driven by easing of capacity constraints

M&M's volumes grew 22% YoY (13% MoM) to 57,217 units (vs est 54,950), driven by UV and tractor volumes on account of easing of capacity constraints.

UV volumes improved 15% YoY (6% MoM) to 27,994 units, driven by easing of capacity constraints and strong growth in pick-up trucks.

While passenger UVs grew by 14% YoY (~10% MoM) to 17,801 units, pick-up trucks volumes grew by 17.5% YoY (flat MoM) to 10,193 units.

Tractor volumes grew by 21% YoY (25% MoM) at 20,499 units (vs est 19,000). Tractor volumes benefited from easing-off supply constraints.

3-wheeler volumes grew 37% YoY (~4% MoM) to 6,177 units. Our FY11 estimates factor in 25.7% volume growth for 3Ws.

Our current estimates factor in 20% volume growth in FY11 (implying residual monthly run rate of 44,687 units). Based on our current estimates, the stock trades at 10.6x FY12E of consolidated EPS of Rs66.7 and 9.1x FY13E of consolidated EPS of Rs77.6. Maintain Buy.

Source : Equity Bulls

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