MAHINDRA & MAHINDRA
CMP Rs 755 Book Value Rs 187 P/E 26
M&M's FY09 Sales grew 12.5% but PAT fell 17%. The automotive business witnessed a turnaround in later part of the year after stimulus packages from the government and agriculture loan waiver. But now the stock looks expensive at more than 25 P/E and with just Rs 187 as Book Value, the margin of safety doesn't attract much. The company depends to a fair extent on tractor sales in this period of the year but failure of Monsoon so far may hamper the demand for its products. Technically the stock looks to resist near up-channel and can see downside towards Rs 640-650 at least.