M&M : Dilemma Of Reality In Infra Cess/EV Concern And Hopes Of Rural Economy/Agri Push

M&M will gain more strength only sustaining above 1285-1335 for targets of 1382-1445

Otherwise, may be turned weak and will again fall towards 1210-1090

Near term impact of infra cess and EV concern may outweigh 

Hopes of future (long term) benefit in rural/agri push.

(There may be big concerns regarding good/even 

distribution of monsoon this year too !!) 

Actual TTM EPS (Standalone) of M&M is at 52.99

And its quoting at an average PE of 25, 

whereas 20 may be a more reasonable PE for the auto sector 

under the increasing regulatory and tax concern 

(sales may be affected despite 7-PC & rate cut hope)

Trading Idea:

CMP: 1268

Sell either below 1285 or in rise around: 1315-1335;

TGT: 1240-1210*-1150-1090* (1-3M)

TSL> 1360-1385

Note: Consecutive closing (3 days) above 1385 for any reason, M&M can further rally up to 1405-1445*-1480 zone in the short to mid term (alternative bullish case scenario).

As par BG metrics & current market scenario:

(based on actual standalone TTM & projected FWD EPS)

Current median valuation of M&M may be around: 1150 (FY:15/TTM)

Projected fair valuations might be around: 1185-1250-1325 (FY:16-18/FWD)

SCRIP	EPS(TTM)	BV(Act)	P/E(AVG)	Low	High	Median	200-DEMA	10-DEMA
M&M	52.99	310.09	20	1145.95	1139.08	1142.52	1239.11	1224.3

M&M

56.95

353.5

20

1188.00

1180.88

1184.44

1239.11

1224.3

M&M

63.5

403.25

20

1254.46

1246.94

1250.70

1239.11

1224.3

M&M

70.85

459.55

20

1325.07

1317.13

1321.10

1239.11

1224.3

Analytical Charts: