M&M-Ford JV Call Off - Capital Allocation Host Up, Says Prabhudas Lilladher
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Prabhudas Lilladher Report
We believe the decision of calling off joint venture between Mahindra & Mahindra Ltd. and Ford is positive given very limited scope for new product development along with sourcing related synergies.
In fact, the amount saved from not investing (envisaged to be Rs 14 billion) can now be better utilized in their sports utility vehicle and electric vehicle segment.
On the other hand, with SsangYong Motor Co. now under autonomous restructuring support, the company is confident to strike a deal with the potential investor by February end.
We are assertive on the company as management has again reinforced investors that capital allocation remains the key focus (target return on equity of more than 18).
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