Fundamentals

CIPLA 

Ticker : 500087
BUY: Rs.600.70 
Target: Rs 663

Cipla is the ninth largest company by the number of prescriptions in the US market. By the end of FY18, the company's geographical revenue mix consisted of India 37 per cent, US 18 per cent, 11 percent from emerging markets, Europe 4 per cent and 22 per cent from other markets and other businesses. In FY18, the formulations exports contributed to 54 per cent to overall revenues. The latest acquisition of the US-based InveGen will help the company to strengthen from back-end to front-end. This acquisition, along with the new product launches in the US and the launch of combination inhalers in various markets, would drive the company's growth going forward. The company has expertise in Indian formulations and is a strong player in South African markets. It has low exposure to the US generics, which is proving beneficial now. Thus, we recommend it as a BUY 

MAHINDRA & MAHINDRA

Ticker : 500520
BUY: Rs.907.25
Target: Rs.995 

M&M has presence in auto and farm equipment segments, deriving revenue of 68 per cent and 28 per cent, respectively, in FY18. As on March 31, 2018, the company had market share of 43 per cent in tractors. On the financial front, the company’s topline was up by 4.4 per cent YoY. Its EBITDA for the year grew by 37.9 percent YoY and EBITDA margin improved from 10.1 per cent in FY17 to 12.7 per cent in FY18. The PAT was up by 19.6 per cent YoY and the PAT margin too jumped from 7.7 per cent to 8.8 per cent. The management expects double digit growth in the tractor segment in FY19 on expectations of good monsoons. It has set aside Rs 15,000 crore as capex over the next three years for capacity expansion and implementing BS-VI norms. It is also planning to launch three new models in the SUV segment. Thus, we recommend it as a BUY.