Technology

For 3QFY2019, revenues grew by ~13% yoy to `13,070cr. Operating margin declined by 190 bps. On the bottom-line front, M&M reported growth of ~24% yoy to `1,144cr on the back of lower taxes.
Outlook and Valuation: We expect M&M to report net revenue CAGR of ~12% to ~`60,634cr over FY2018-20E mainly due to healthy growth in automobile segment i.e. utility vehicles (on the back of new launches and facelift of some models) and strong growth in tractors segment driven by brand recall and improvement in rural sentiment. Further, on the bottom-line front, we expect CAGR of ~16% to `5,429cr over the same period on the back of margin improvement. Thus, we recommend BUY on the stock with a Target Price of `850.

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