Ashutosh Goyal of Edelweiss is of the opinion that even though Nissan is not partnering with Maruti, this will not have a huge setback as Nissan intends to market its cars under its own brand name.
He believes that it is a big boost for Mahindra’s efforts to increase their presence in the automotive space.
Is it a kicker for Mahindra and Mahindra?
Definitely it is a big boost for Mahindra’s efforts to increase their presence in the automotive space. So far they have only been targeting the utility vehicle segment, which is only 16-17% of the overall passenger vehicle market and they have also been saying that they want to expand their addressable market in the passenger vehicle segment and now with this alliance they will be looking at the entire passenger car industry.
What is your price target for M&M after this kick off from Nissan?
We don’t have a price target officially on M&M, we have a buy rating on Mahindra, it’s the top pick in the automobile space as of now. We don’t have official price target.
Why is it then the market seems to be valuing Maruti higher than Mahindra so much?
Maruti so far has been the only pure play car company, which is attracting higher valuations related to other players because it’s basically trading on the India consumption or the income growth story while Mahindra’s existing business of tractors and utility vehicles is considered to be a more cyclical kind of business. So that is why it has been attracting a higher valuation. But Maruti’s valuations are much higher, much richer compared to Mahindra’s valuation.
He believes that it is a big boost for Mahindra’s efforts to increase their presence in the automotive space.
Is it a kicker for Mahindra and Mahindra?
Definitely it is a big boost for Mahindra’s efforts to increase their presence in the automotive space. So far they have only been targeting the utility vehicle segment, which is only 16-17% of the overall passenger vehicle market and they have also been saying that they want to expand their addressable market in the passenger vehicle segment and now with this alliance they will be looking at the entire passenger car industry.
What is your price target for M&M after this kick off from Nissan?
We don’t have a price target officially on M&M, we have a buy rating on Mahindra, it’s the top pick in the automobile space as of now. We don’t have official price target.
Why is it then the market seems to be valuing Maruti higher than Mahindra so much?
Maruti so far has been the only pure play car company, which is attracting higher valuations related to other players because it’s basically trading on the India consumption or the income growth story while Mahindra’s existing business of tractors and utility vehicles is considered to be a more cyclical kind of business. So that is why it has been attracting a higher valuation. But Maruti’s valuations are much higher, much richer compared to Mahindra’s valuation.
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