As we all know, Mahindra & Mahindra is one of the leading automobile sector player when it comes to SUV and tractors. There is competition to them but minimal. And it does not looks like anyone would be their big competitor in near future to snatch away their market share. In SUV space, everyone is trying to take away the market share that Mahindra scorpio enjoys but hardly anyone has been able to do that.Recently Mahindra & Mahindra has avquired Ssangyong motors. Ssangyong motors is a big South Korean SUV maker. This deal would bring in SUV technology and presence in large markets for Mahindra & Mahindra.
Mahindra & Mahindra have many subsidiary companies holding good amount of value. This value unlocking will happen eventually but many of it's subsidiaries doing good business are actually adding value. This should take it's intrinsic value only towards north.
Company has debt to equity ratio of only 0.4 which shows that it's balance sheet is strong. Company is expected to grow at 12% Compounded Annual Growth Rate in next two years.
At estimated EPS 0f 44.9 in FY 12, stock trades at forward P/E of ~14. With company's strong market share in automotive sectors, it is part of consumer growth story in India. Mahindra & Mahindra has a good upside potential in near future. Buy stock for medium term with target of Rs.800
