Mahindra & Mahindra hits fresh 52-week high

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Mahindra & Mahindra (M&M) hit a fresh 52-week high of Rs 1,480, up 3.3% on the BSE in noon deal trade, after the company announced that it plans to increase prices of its passenger and commercial vehicles by up to 3% with effect from January 1, 2018. The stock was the top gainer among the S&P BSE Sensex at 12:16 PM.

“We have been holding back on price hikes and absorbing the higher input costs for a while, but with the increase in commodity prices we will have to take a price increase,” Rajan Wadhera, President - Automotive Sector, M&M said on the price hike.

Meanwhile, the stock will turn ex-bonus on Thursday, December 21, 2017 in the proportion of 1:1, i.e. 1 bonus equity share for every 1 share held as on record date.

M&M has fixed December 23, 2017 as the record date for the purpose of determining members who would be entitled to the bonus equity shares.

The STOCK MARKET has outperformed the market by gaining 11% after the company on November 5 said that its board will consider bonus issue. On comparison, the S&P BSE Sensex was down 0.47% during the same period.

Nifty outlook and few trading ideas by Prabhudas Lilladher

STOCK MARKET - Nifty outlook and few trading ideas by Vaishali Parekh, Research Analyst - Technical Research at Prabhudas Lilladher:

NIFTY VIEW:
Markets witnessed a volatile session to see a dip midway by way of profit booking activity but finally in the last leg of the session saw short covering to close on the positive side. The support for the day is seen at 10180 while resistance is seen at 10320.

BUY MAH INDRA& MAHINDRA
CMP: Rs 1,431.60
TARGET: Rs 1,510    
STOP LOSS: Rs 1,380
The stock has been moving in an upward trend with a series of higher bottom formation pattern in the daily chart and technically is poised for further gains in the coming days. With the indicators looking favourable thus supporting our view of a positive bias,  we anticipate a price rise in the stock and with decent volume participation witnessed,  we recommend a buy in this stock for an upside target 1510 of keeping a stop loss of 1380

BUY L&T FINANCE HOLDINGS
CMP: Rs 163.75    
TARGET: Rs 180    
STOP LOSS: Rs 150
The stock has witnessed a decent correction in the recent past and we anticipate a bottom formation has been maintained at current levels. We expect a rise from here on to scale till 180 levels with potential. With good volume activity seen, Disclaimer: The analyst may have positions in any or all the stocks mentioned above, we recommend a buy in this stock for an upside target of 180 keeping a stop loss of 152

Markets check: Buy M&M Finance, Jindal Steel and Voltas

STOCK MARKET - Few trading ideas by Vaishali Parekh, Research Analyst - Technical Research at Prabhudas Lilladher:

NIFTY VIEW:
As said earlier, Nifty after the decline from the levels of 10,500, now has broke the significant level of 10,250 and the chances of further profit booking in the coming days cannot be ruled out. We have now the level of 9,980 for Nifty as the crucial support for the near term. However, the support for the day lies at 10,170 while resistance lies at 10,270.

BUY MAH & MAH FINANCE
CMP: Rs 433.55      
TARGET: Rs 470      
STOP LOSS: Rs 413
The stock has been in an upward trending mode and gradually it has been making a higher-bottom formation and with the formation of a bullish candle, the bias has become significantly positive and we anticipate it to rise up further to scale up to Rs 465-470 levels. The RSI has indicated a steep rise and has shown a trend reversal signaling a buy. With volume activity on the rise, we recommend a buy in this stock for an upside target of Rs 470 keeping a stop loss of Rs 413.

BUY VOLTAS
CMP: Rs 576.60      
TARGET: Rs 630        
STOP LOSS: Rs 550
The stock has been on a good run for a long time and maintained the uptrend consistently. The RSI has been on the rise and has significantly maintained the positive bias. We anticipate the stock to rise further with strength and potential and scale fresh new heights of Rs 620-630. With favourable factors supporting our view and decent volume participation witnessed, we recommend a buy in this stock for an upside target of Rs 630 keeping a stop loss of Rs 550.

Mahindra Logistics falls below issue price after quiet debut

Mahindra Logistics (MLL) was trading at Rs 422 at 10:05 am,  below its issue price of Rs 429 per share, after making quite debut on the bourses.

On the National Stock Exchange (NSE), the stock listed at par of Rs 429, while on the BSE, it opened less than 1% higher at Rs 432. It touched low of Rs 420 on the NSE and of Rs 421 on the BSE. A combined 4.64 million shares changed hands on the NSE and BSE.

The initial public offering (IPO) of MLL was oversubscribed over 7.9 times with the reserved portion for qualified institutional buyers (QIBs) was oversubscribed 15.60 times, non-institutional investors 2.04 times and retail investors 6.10 times, the exchange data shows.

MLL, a subsidiary of Mahindra & Mahindra, raised Rs 829 crore through the issue, at higher end of price band of Rs 425-429 per share. Out of which, Rs 247 crore had raised from anchor investors. Since the issue comprises of only offer-for-sale or OFS, the company will not receive any proceeds from it.

MLL is one of the India’s largest third party logistics (3PL) solutions providers in the logistics industry. The company follows an asset light business model in which most assets (vehicles and warehouses) are owned /provided by its business partners. The company operates in two business segments i.e. supply chain management (SCM) and corporate people transport solutions (PTS).

“MLL has exhibited CAGR (compound annual growth rate) of 15% and 25% in top-line and adjusted bottom-line respectively, which is better than its players i.e. VRL logistics and Transport Corporation of India. In terms of returns, company has shown a better return profile (ROE & ROIC of 17.3% and 40% v/s. peer group avg. – 13% & 14% respectively). Based on its growth story, diversification strategy, strong parent repute and post GST (Goods and Service Tax) attractiveness of the logistics sector, we assign Subscribe rating to the issue,” Angel Broking said in IPO note.

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Mahindra Logistics IPO opens today: Should you invest?

STOCK MARKET - Mahindra & Mahindra subsidiary Mahindra Logistics (MLL), which will open its initial public offering on October 31, with a price band of Rs 425-429 per share, will be the first logistics firm to hit the market after the rollout of GST.  The offer will close for subscription on November 2, 2017.
The issue comprises sale of 1,93,32,346 shares, including offloading of 96,66,173 shares -- amounting to 13.74% stake -- by the parent firm Mahindra and Mahindra. Normandy Holdings would sell 92,71,180 shares, while Kedaara Capital would offloa 3,94,993 scrips. Normandy Holdings is a 100% subsidiary of Kedaara Capital.
The minimum bid lot for the offer is 34 equity shares and in multiples of 34 shares thereafter. The book running lead managers to the issue are Kotak Mahindra Capital Company and Axis Capital.

Here’s what the brokerages say about the issue:

Centrum Wealth Research
According to the brokerage, at the higher end of the price band of Rs 429, the issue is priced at P/E of 66.9x (post dilution) on FY17 basis, which appears to be expensive given the low financial performance (FY15-17 - revenue and PAT CAGR of 18% and 8%, respectively, with negative operating cash flows in the last 2 years).
“Even if money raised at such valuations was flowing into the company, it would have ultimately belonged to shareholders. But in this case 100% of the money raised is going to the selling shareholders and not into the company,” the brokerage added.
The issue looks expensive at the given valuation and clubbing that with the lackluster performance of other M&M group companies it becomes difficult to logically recommend subscribing to the issue, it said.

M&M Financial rallies 10% post Q1 results

STOCK MARKET - Mahindra & Mahindra (M&M) Financial Services surged 10% to Rs 401 on BSE on the back of heavy volumes after the company said it has had higher collection efficiency, lower repossessions and lower growth of non-performing assets (NPAs) in the June quarter (Q1FY18) compared to same period of the previous year, on account of improved sentiments at the rural markets.

The company reported 45.7% year on year (Y-o-Y) drop in its consolidated net profit at Rs 47 crore in Q1FY18, due to higher provisioning for bad loans. It had reported profit of Rs 108 crore in the year ago quarter. Total income from operations during the quarter under review was up by 19.6% to Rs 1,875 crore on Y-o-Y basis.


The company made provisions of Rs 425 crore compared to Rs 361 crore in the previous quarter. The company made an additional provision of Rs 83 crore during the quarter on a prudential basis, it said in a press statement.

Gross non-performing assets (NPAs) in percentage terms stood at 10.5% versus 10.7% in Q1FY17.  Net NPA stood at 4.4% against 5.4% in previous year quarter. Gross NPA and Net NPA were 9% and 3.6%, respectively, in March 2017 quarter.

At 02:24 pm; the stock was up 9% to Rs 396 on BSE, as compared to 0.09% rise in S&P BSE Sensex. The trading volumes on the counter jumped more than three-fold with a combined 12.98 million shares changed hands on the BSE and NSE so far.

The stock is trading close to its record high of Rs 405 touched on October 4, 2016 during intra-day trade.

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