For 1QFY2019, M&M posted good set of results, exceeding our expectations on both, top-line as well as bottom-line fronts. Revenues grew by ~9% yoy. On the bottom-line front, M&M reported growth of ~63% yoy to `1,221cr on the back of strong top-line growth and operating margin improvement.

Outlook and Valuation: We expect M&M to report net revenue CAGR of ~13% to ~`62,235cr over FY2018-20E mainly due to healthy growth in automobile segment like Utility Vehicles (on the back of new launches and facelift of some models) and strong growth in Tractors segment driven by strong brand recall and improvement in rural sentiment. Further, on the bottom-line front, we expect CAGR of ~18% to `5,600cr over the same period on the back of margin improvement. Thus, we recommend BUY on the stock with target price of `1,050.

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