Motilal Oswal has upgraded M&M to buy from neutral with a target of Rs 1724 per share, indicating an 18 percent upside. Betting big on strong earnings cycle ahead the brokerage firm is confident that monsoon and recent launches will drive its growth. It says that that the worst is over for M&M not only in its core businesses of tractors and utility vehicles (UVs) but also in key subsidiaries.
The brokerage firm hopes that after a four-year gap both the businesses tractors and UVs will deliver 14.5 percent volume CAGR over FY16-18. With rural India contributing 72 percent to standalone net profit, M&M would be one of the biggest beneficiaries of a normal monsoon, Motilal Oswal adds.
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