Mahindra & Mahindra Automobile division dispatches for the month of Jan'11 surpassed our estimates with robust performance by passenger UV segment. Overall dispatches for the month grew by 21.8% YoY to 37k units. The UV segment comprising of Scorpio, Xylo and Bolero witnessed a growth of 11.5% to 16k units against our expectation of a flat growth. Pickups and SCV segment grew by 17% to 10k units. During the month M&M launched its new pickup Genio based on the Ingenio platform. Logan sales doubled YoY to 1,120 units. The three wheeler dispatches, which have witnessed a strong growth during the year, were higher by 37.3% to 6.1k units. LCV & MHCV dispatches were at 1,023 units. Exports rose 82.3% to 2,117 units including 404 units of Logan.

Tractor division dispatches were higher by 21.5% at 20.5k units as against our expectation of 19.2k units. The tractor division has witnessed a 21% growth YTDFY11 supported by good monsoons and higher crop realisations.

We maintain a `BUY' recommendation on the stock with a SOTP based target price of Rs897.