Headquartered in Mumbai, Maharashtra, Mahindra & Mahindra Limited (M&M), the flagship company of the Mahindra Group, is a diversified business company having a presence in major industries such as automotive, agri-business, information technology, financial services, etc. The company has manufacturing facilities within the country and international operations in countries including the US, France, Japan, China, etc.
Analyzing the quarterly numbers reported by the company, the revenues, as well as net profits, have shown growth exhibiting operational efficiencies and well-mannered cost management systems.
The revenues of Mahindra & Mahindra took a shift from Rs 29,870 crores in Q2 v/s Rs 30,620 crores in Q3. Moreover, the net profit numbers have been on the rise with the most recent shift from Rs 2,586 crores in Q2 to Rs 2,603 crores in Q3.
In addition to the above, the net profit margins of the company have shown positive results with a good amount of increase in numbers with the latest one being from 4.81 percent during FY20-21 to 7.77 percent in FY21-22.
The debt levels of the company, though more than the desired levels, have seen a reduction in the past three financial years and the latest shift is from 1.89 in FY20-21 to 1.59 during FY21-22.
Coming onto the profitability metrics, the basic ones such as the return on equity (ROE) and return on capital employed (ROCE) have shown decent growth with the former increasing from 9.14 percent in FY20-21 to 16.44 percent in FY21-22 and the latter moved up from 9.46 percent to 11.92 percent during the same period.
In accordance with the shareholding pattern for the quarter ending March 2023, promoters of the company hold a 19.37 percent stake, whereas, Foreign Institutional Investors (FIIs) have been observed to be consistently increasing their stake from 37.3 percent during March 2022 and currently stand at 39.24 percent.
ICICI Direct gave a ‘Buy’ tag to the company’s stock with a target price of Rs 1,665 indicating an upside of around 36 percent in comparison to the current price of 1225.
The rationale behind giving the recommendation is pertaining to the company’s prudent behavior related to capital allocation decisions, UV differentiation, and EV proactiveness.
The company’s stock traded flat on Friday and closed at a price of Rs 1,225.10. In the last month, the stock has been able to gain around 7 percent and contributed towards increasing shareholder’s wealth.
Keeping a purview of three years, the stock has delivered multibagger returns of around 235 percent. It means that if someone would have invested Rs 1,00,000 in the stock, it would have converted to Rs 3,35,000 within the above-mentioned time span.
Written by Amit Madnani
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