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Trading Call - Edelweiss
Tuesday, May 29, 2007
M & M, Buy – 1 week
M & M is most attractive among the peer group on the back of stability in margins. We expect good quarterly results for Q4FY07 with a 46% yoy growth in adjusted net profit for the quarter.
Scorpio has done well in the last quarter. Also the Logan numbers are expected to be encouraging.
Although tractor sales growth has come off its high rate and has been flat in most recent months, we expect it to stabilize at around 8-10% on back of normal monsoon outlook.
On sum of the parts valuation basis our estimates indicate that the stock is trading at 9x FY08E and 8.3x FY09E core earnings respectively at current market price of INR 733, with the valuation of subsidiaries and investments at INR 411 per share.
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IMPORTANT DISCLAIMER
Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.
