Mahindra and Mahindra (M&M) gave conservative guidance for the tractor industry. The management said the tractor industry will grow in the low single digits in FY22. This compares to the 28 percent growth in FY21.
The management also raised the capital allocation plan to Rs 17,000 crore from Rs 12,000 crore floated earlier. This could impair the free cash flow generation of the company.
Global brokerage firm CLSA raised its target price on M&M to Rs 1,090 per share from Rs 1,060 earlier expecting better margins for the auto and tractor business.
However, Phillip Capital has downgraded M&M to a ‘sell’ and lowered the FY22 and FY23 estimates on the back of the conservative tractor guidance as well as the raised capital allocation plans.
Watch the accompanying video of CNBC-TV18’s Sonia Shenoy for more details.