M&M joins ₹1-trillion m-cap club

Our Bureau Chennai | Updated on April 17, 2018
The mid-cap fund will re-open for continuous sale and repurchase from February 6, 2018, Ashutosh Bishnoi, CMD, Mahindra AMC, said

Titan Company zeroing in on Tata Motors to become No 2 Tata group firm

For the shares of Mahindra & Mahindra, it was a dream day as they entered the prestigious ₹1 lakh crore market capitalisation club after the stock settled with gains of over 1 per cent.

The stock of M&M opened high at ₹815 and rose to a new peak of ₹819.1 and closed at ₹809.6, up 1.05 per cent; the market capitalisation of the company stood at ₹1,00,648.87 crore.



Following the jump in its m-cap, M&M has become the 29th company to join the lakh crore or trillion market-cap club.

According to BSE, TCS is at the top with ₹6.06 lakh crore market-cap, followed by Reliance Industries (₹5.978 lakh crore), HDFC Bank (₹5.05 lakh crore), ITC (₹3.267 lakh crore) and HDFC (₹3.129 lakh crore).

While according to the NSE, the stock was listed on January 3, 1996, BSE says the listing happened before 1991.

Kotak Securities analysts, after meeting the company management in March, said: The management outlined its automotive business strategy and shared details on its new launch pipeline, plans on electric vehicles, and in-house R&D capabilities. The company showcased its extensive R&D efforts towards developing new BS-VI compliant gasoline engine range and achieving significant reduction in cost of BS-VI compliant diesel vehicles compared to earlier expectations, which was quite impressive. “M&M remains our preferred pick in the sector given attractive valuations and reasonable growth prospects and our target price stays at ₹945.”



Titan glitters

Meanwhile, Titan Company is at striking distance to replace Tata Motors as the second-most-valued-company in terms of market capitalisation among the about two dozen listed Tata group companies.

At the end of Tuesday’s trading, Titan’s market-cap stood at ₹88,632 crore, against Tata Motors’ ₹97,274.78 crore.

Titan Company, which was earlier known as Titan Industries, commenced operations in 1984 under the name Titan Watches, a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation. However, in 1994, Titan diversified into jewellery.

According to its 2017 annual report, jewellery business is the maximum revenue generating entity under the Titan umbrella now, thanks to its Tanishq brand. The total revenue of the jewellery business jumped 17.4 per cent in FY17 to ₹10,237 crore over FY16, whereas revenue from watches and accessories stood at ₹2,028 crore.

Delivering value

Titan’s stock has delivered immense value to investors over the last several years, and its ability to compound earnings at 23 per cent a year over the past 10 years has been a key enabler in this regard, said JM Financial Services in a recent research report and added: “We believe 20 per cent revenue CAGR over FY18-23E should also support margin expansion that should ideally lead to an even higher rate of growth in profit over the same period (operating leverage), which would help sustain the stock’s premium valuation.”

Published on April 17, 2018

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