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Question posted: 09 04 2009 10:12:40 +0000,
5 answers, 183 views, last activity
07 06 2010 20:18:08 +0000
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Today afternoon the market gained a good momentum in terms of trading where key indices to the day’s high after a firm Europe helped lift the sentiment, where metals, automobile and FMCG stocks were seen as the frontrunners. BSE Sensex picked up pace which surged 270.67 points or 1.76 per cent to 15,669. The index leapt to a high of 15,679.10 from a low of 15,358.94.
Most probably the biggest Sensex gainers were Mahindra & Mahindra at (6.34%), HDFC (3.47%), Larsen & Toubro (3.36%), ITC (3.28%), Hero Honda (3.22%) and Reliance Industries (2.66%).
What do you think about Mahindra & Mahindra stocks? will they be able to perform really good? what are your views regarding this.
I feel it is an opportune movement to highlight the predicament of Indian economy and it's commercial environment taking M&M as an example representing other industries.
M&M has a roi of 13%, where roi= profit margin on sales x asset turnover.
For M&M roi* thus = 10 x 1.3 = 13%
Now to make available products within the means of purchasing power facilitated by govt. the profit margin need be lower and asset turnover larger. This will preserve the profitability of the company and better welfare for people and functional outcomes in running their operations. The problem is our road facilities are very unscientific and restricted no. of automobiles can only be accomodated preventing the larger growth of industries like M&M and whatever happens congusts the road system. So for companies to b profitable investments marginal pricing need be employed abd for that there need be better facilitation to efficient economic environment. Till then our companies like M&M cannot be great investments but probably normal investments.
roi is return on investment*
Thanks Mathew and others for their views reagrding the question. Thanks for the detailed view which you people have come up with.....
Ther ratios of the M&M till 2008 seems OK roi 13%, continuosly paying dividends of around Rs11, medium debt, low current ratio which is a negtive 0.93 where 2 is less risky and no reserves as such so no bonus can be expected. So it is not an extraordinary company superfical analysis. Their future look good, collaboration with Renault, venturing to aerospace and growth in the present operations etc;.
For an equity of around 280Cr M&M earns about 1100Cr net profit. But promoters hold about 30% and institutions hold around 45-48%. Public holding is as low as 10% and thats where the fancy is.
It has almost burnt its fingers by taking over kinetic motors and not utilizing 2 wheeler segment through it. Perhaps satyam take over also - for long term - is not so good a step by its sister concern.
Its four wheeler segment is far better. Presence in defence sector through its various subsidiaries is also a good +ve point. Its vehicles like scorpio and bolero are far more popular than its rivals. But, since it has already come out of its bonus issue last year (or two), there is no much charm left for long term investors. Let us see how its small car segment entry pans out shorty and then decide. presently there is no much hurry to invest at Rs.870, I think.
From the results, it can be clearly predicted that the current condition of Mahindra and Mahindra is very good. It is leading with the difference from 3 points whereas other are differentiating with each other with 1 or less than one points. So, Mahindra and mahindra is in a very good position. If it can maintain its current position, it will definitely perform very well...
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