Mahindra & Mahindra (M&M)’s Q1FY11 results were in line with our expectations at the operating level. However, a higher than expected other income and a lower than expected tax rate led the net profit marginally top our expectations.
The total income grew by 21.6% y-o-y to Rs5160.1 cr (against our estimate of Rs5346 cr) mainly on account of a 24.6% y-o-y growth in overall volumes.
We shall review our estimates and come out with a detailed note post the conference call with the management. At the current market price, the stock is quoting at 16 times FY2011E and 14.5 times FY2012E standalone earnings. We maintain our Hold recommendation on the stock.
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