Results ahead of estimates: Mahindra & Mahindra (M&M;)s 2QFY2016 numbers beat our estimates on account of better-than-anticipated operating performance. For MM+MVML (Mahindra Vehicle Manufacturers Ltd), revenues for the quarter dipped 3% yoy to Rs8,794cr, largely in line with our estimate of Rs8,490cr, owing to a 10% volume decline in the quarter. Automotive volumes declined 2% yoy while tractor volumes dipped 26% yoy. However, realization/vehicle grew 8% yoy on account of better mix and price hikes in both the automotive and tractor segment, thereby limiting the downslide in the top-line. The operating margin, at 13.2%, surprised positively, beating our estimate of 12%. Cost control initiatives, benign commodity prices and price hikes boosted the margins. Given the robust operating performance, the Adj PAT at Rs978cr came in better than our estimate of Rs907cr. Outlook and valuation: M&M; is likely to witness volume recovery from 2HFY2016 in both the automotive and the tractor segment. In the automotive segment, M&M; recently introduced TUV 3OO which has received encouraging response and plans to enter compact UV space in January 2016 which will likely enable it to regain market share. Further, the recently launched small commercial vehicle Jeeto and 1.2 tonner vehicle Supro would boost the...