HSBC has raised the price target of Mahindra & Mahindra Ltd to Rs 840 from Rs 795, and it has maintained “buy” rating.
HSBC says India's tractor industry has grown “strongly” in the past two years and it expects a continued growth of 10-12 per cent in FY19 as well.
With Madhya Pradesh, Rajasthan and Karnataka due for elections this year, nearly 30 per cent of total tractor market can see higher spending this year, it adds.
Mahindra & Mahindra reported a better-than-expected Q3 profit earlier this month, with domestic tractor sales rising over 6 per cent. “Normal north-east monsoons and good reservoir levels helped in boosting the rural sentiment and demand for tractors," the company had said.
Up to Wednesday’s close, the stock had risen 8 per cent in 12 months versus 12 per cent gain in the Nifty Auto index. Thirty eight out of 42 brokerages covering the stock rate it "buy” or higher and four “hold"; their median price target is Rs 880.