M&M Q2 Review - Above Our Estimate; Strength In The Auto Business Drives Performance: Motilal Oswal
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Motilal Oswal Report
The beat in Mahindra and Mahindra Ltd.'s Q2 FY22 performance was driven by better mix in the auto business, cost-saving initiatives, and higher other income.
Growth in tractors is slowing, particularly on a high base of FY21. However, the auto segment is expected to see strong momentum in both sports utility vehicles (led by new products and the easing of supply issues) and light commercial vehicles (cyclical recovery).
We increase our FY22E/FY23E earnings per share estimate of M&M by 9%/8% to factor in stronger than expected XUV700 response as well as an improving light commercial vehicle cycle.
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