Executive Director | CLSA
Mahesh Nandurkar of CLSA likes M&M as a medium-term story.
Nandurkar told CNBC-TV18, “M&M results have disappointed. We can’t go too much in for details because I haven’t seen much of details on that as yet. We have highlighted as a part of that report some of the themes that we believe will pan out over a long period of time so the next three to five years or even longer than that. And our basic thesis here is that rural demand is holding up quite well and the reason for that is over the period of last five years we have seen a virtual doubling of every commodity prices so which has put money in the hands of farmers and there is clearly more money in the rural economy, the agricultural economy. The second thing is about this Rural Employment Guarantee Scheme which has put like a floor on the rural wages. So therefore the rural consumption is holding up quite well and it’s visible not just in the numbers of M&M but also in some of the two wheeler stocks, the staple stream etc. and we don’t think that this theme is going anywhere. So from that point of view we like M&M as a medium-term story.”