Gowhar Rasool MBA(Hons.

) Q1903

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COMPANY OVERVIEW The Mahindra Group’s Automotive Sector is in the business of manufacturing and marketing utility vehicles and light commercial vehicles, including three-wheelers. It is the market leader in utility vehicles in India since inception, and currently accounts for about half of India’s market for utility vehicles. Mahindra embarked on its journey in 1945 by assembling the Willys Jeep in India and is now a US $7.1 billion Indian multinational. It employs over 1,00,000 people across the globe and enjoys a leadership position in utility vehicles, tractors and information technology, with a significant and growing presence in financial services, tourism, infrastructure development, trade and logistics. The Mahindra Group today is an embodiment of global excellence and enjoys a strong corporate brand image. Mahindra is the only Indian company among the top tractor brands in the world. It is today a full-range player with a presence in almost every segment of the automobile industry, from two-wheelers to CVs, UVs, SUVs and sedan. Mahindra recently acquired a majority stake in REVA Electric Car Co Ltd. (now called Mahindra REVA), strengthening its position in the Electric Vehicles domain.The Mahindra Group expanded its IT portfolio when Tech Mahindra acquired the leading global business and information technology services company, Satyam Computer Services. The company is now known as Mahindra Satyam. Mahindra is also one of the few Indian companies to receive an A+ GRI checked rating for its first Sustainability Report for the year 2007-08 and has also received the A+ GRI rating for the year 2008- 09. ` (MONEY CONTROL)

The chart gives us the glimpse of share price movement of M&M form last 10 years. The pattern shows a upward growth. We will discuss further and take help of another tools to see whether this trend will be actually moving up or down.

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COMPANY FORCASTES AND EXPERT ANALYSIS: Governed Company 2009 Award from the Indian Merchants Chamber and the Asian Centre for Corporate Governance and Sustainability. During the year, CRISIL has revised the highest level rating, (Level 1) for Governance and Value Creation for the fourth year in a row. This rating reflects that the capability of the Company with respect to wealth creation for all its stakeholders SOME PROJECTS AND PLANS To ease the associated risks, your Company is taking great care in building new products around the customers ‘needs and plans to bring in the incremental capacity from this new plant in phases. M&M has target of Rs 844: Thunuguntla, M&M signs deal to buy Ssangyong Motors for $462.3mn.

EXPERT REVIEWS AND SOME TECHNICAL ASPECTS OF M&M
Experts are optimistic on Mahindra and Mahindra and has recommended buy the stock with a target of Rs 903 in its November 25, 2010 .Mahindra & Mahindra is the only Indian company among the top three tractor manufacturers in the world. The Group has a leading presence in key sectors of the Indian economy. Mahindra & Mahindra has net sales and net profits are expected to grow at 24% and 51% over FY09 to FY12. The Automotive Sector contributed to the revival of The Indian Auto Industry with the Mahindra Xylo, which was launched at the height of the recession and which went on to become an immensely successful vehicle. EPS of the company is expected to be at Rs 44.31 and Rs 50.10 for the earnings of FY11E and FY12E respectively. Experts recommend ‘BUY’ in this particular scrip with a target price of Rs 903 for medium to long term investment. The Company has signed a definitive agreement to buy Ssangyong Motor Company in Seoul. Despite prolonged global challenges, the Indian economy showed signs of recovery in most of the Sectors in the Financial Year 2009-10. The risk appetite returned to financial markets as equities and debt raising gained on the back of abundant liquidity. Even though things looked to be on an upswing.

(Annual Report 2010) The Stock Performance of M&M is very much following the same pattern of SENSEX. If the trend continues and government continues to allow FII enter into Indian markets we can say that this particular stock will go up . But we can never be sure when other external forces will act in

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negative way and push the stock down like recent 2G scam and financial institution scandals ruined Indian markets

Earnings per share serve as an indicator of a company's profitability. The EPS of M&M was at peak during year 2008 how ever with the global melt down the company EPS went down as the purchasing power parity of people went down. With the revival of the market the EPS of M&M is also showing an upward trend. Automobile sector which as of now is growing at highly optimistic pace it is forecasted that this EPS will further go up and shareholder can have really good time. EPS measures theprofit available to the equity shareholders per share, that is, the amount that they can get on every share held.

Although a simple indicator to work out, the P/E is actually quite difficult to interpret. It can be extremely informative in some situations, while at other times it is next to meaningless. As a result, investors often misuse this term and place more value in the P/E than what is acceptable. A better interpretation of the P/E ratio is to see it as a reflection of the market's optimism concerning a firm's growth prospects. Although a high P/E ratio could mean that a stock is overvalued, there is no guarantee that it will come back down anytime soon. The P/E is one of those numbers that investors throw around with great influence as if it told the whole story/E gives you an idea of what the market is willing to pay for the company’s earnings. The higher the P/E the more the market is willing to pay for the company’s earnings. Some investors read a high P/E as an overpriced stock and that may be the case, on the other hand it can also indicate the market has high hopes for this stock’s future and has bid up the price. Taking this picture into

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account if we look at M&M PE is ratio is quite good. so we can say that investors are quite confident in this company but we can be never sure .

One of the best and easiest ways to classify an overvalued stock is to compare the present market price of stock with its book value. One can say that Book value is the price of stock that company thinks must be paid by investors to own one of them. Any additional price paid by an investor (above book value) is a decision of investor with an expectation that the stock price has ability to rise in time to come. Ideally all stocks must e purchased at or below its book value. In case of Mahindra and Mahindra the stock price is much higher than the book value in 2006 the market price is 7 times more than book value and as of 2010 the market price is 5 times more than the book value of share. If we look at this trend it can be very lucrative for speculators to invest in this share , however for long term investors this will not be a good deal as the tendency of share will be to move towards its book value in long run and that will not be a profitable business for investors. 2008 Down Trend:-After sustaining growth in the first half of 2008-09 fiscal a severe slowdown in the October- December 2008 quarter, the segment witnessed a 7 per cent decline in volumes during October-December 2008.After a sustained net profit growth of 25-30 per cent in the five years to 2006-07, M&M saw a sharp deterioration in the profit picture in the first nine months of 2008-09, concentrated mainly in the December quarter. While revenues on a consolidated basis grew 13.2 per cent to Rs 21,652 crore, net profit after minority interest declined by 26 per cent to Rs 809.5 crore from Rs.1095 crore. M&M attributed the drastic fall to foreign exchange loss of Rs 182 crore and lower sales of utility vehicles and tractors. Sales of utility vehicles during the quarter fell 26 per cent to 29,184 units (39,282 units in last year’s quarter) while tractor sales were 15 per cent lower at 20,686 units (24,266 units).
SOURCE (BUSINESSLINE FEB 2009)

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(Source Money Control) 27/11/2010 Above is the Indian Auto Industry Index (BSE) shows the up’s and down’s over the period of 5 years. At first in 2003 when major giants got listed on stock exchange TATA Motors, Maruti Suzuki, etc. Indian auto industry start picking up growth gradually in the first end of 1st quarter index reaches to its highest in his history. Than there was steady fall in the index and in the mid 2006 reaches to years lowest point it again start booming and than year on year we saw a up and down movement in the index as lots of new players came in Indian market with foreign alliance but when 2008 came with global slowdown it brings the demand of automobile so low that index reaches to its lowest in past 5year . The majority of the company even shutdown their manufacturing units for more than a week, production came down because of less demand in the economy. Also no further launches were made in mid or late 2008 and deferred to next year. There was also fall in FDI’s in automobile Industry. But in the beginning of 2009 right from 1st quarter auto industry again start repossession and we saw a tremendous growth in auto industry which never seen before not in India but all over the world. The demand of 2 and 4 Wheelers start increasing speedily which also force auto industry to employ more workers to meet demand and within the 2nd quarter of FY2009-10 Auto index reaches to its highest ever crossed mark of 6000. And this growth of industry will be carry further as festive season still to come, so there is a lot of capacity to growth in this industry .

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Mahindra and Mahindra showed a positive trend in paying dividends till 2008 , but the scenario changed in 2008 as the company’s dividend per share fell down even though the fall in profits in because of global meltdown2008 -09 still, the company However are continued to pay good dividends to keep share holders into confidence . The quick ratio is a very stringent measure of solvency. A general rule of thumb suggests that the quick ratio should be around 1. M&M is always showing a positive trend as its ratio is always approaching to1 except in 2008,

M&M shows positive trend in Sales Revenue over the past 5year. However recession brought hurdles but the company has potential to grow in future as lots of products arestill to add in their portfolio. Moreover increased demand in foreign market also seems to be a positive signal for better future.

Resistance(Rs 808)

Support (Rs697Apprx) 1. Resistance & Support Level This Technical tool helps in telling that what would be the price band of share price in which it move in near future on the basis of past high and low levels made by a specific scrip. Resistance Level shows the price above which share price will not move in normal case on the other hand Support level shows the minimum share price which can be touched by share or crossing of this share will not be there in normal market condition (This is For 3 months).

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CONCLUSION:For M&M motors there is a chance of getting correction, as it already went on high side in a very short period of time so holding the shares for long time could be a wrong step, so at this point of time those who invested earlier can book their profit or new investors can buy now and sell with in short period of time by earning profit in short period of time.

Thanks and Regards Gowhar Rasool MBA (Hons.) Lovely Professional University 10905683

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