Bangalore: IIFL, the institutional equities division of India Infoline has maintained its add rating on Mahindra & Mahindra (M&M), automotive maker with a price target of Rs 800. IIFL report says, "With improved financing in the rural markets, M&M's core automotive business is doing well. We particularly like the sustainable competitive advantage that the combination of the UV and tractors business provides in the rural markets. M&M is the only player in the Indian auto space that faces no significant competitive threat from foreign auto makers. The stock has rallied sharply of late on improving value from key subsidiaries Tech Mahindra & Mahindra Holidays. We raise our valuation of subsidiaries from Rs 225/share to Rs 272/share and that of the automotive business from Rs 450/share to Rs 528/share (including PTL) based on 7x FY11ii EV/EBITDA. We maintain ADD, target of Rs 800." M&M's business in rural India has been one of the important factors for taking company to the growth graph. M&M derives more than 75 percent of its standalone revenues from rural India. Rural India accounts for 95 percent of M&M's tractor sales (which in turn accounts for ~30 percent of M&M's total revenues). Mahindra management said, "The financing for M&M vehicles has improved significantly in the last six months. Mahindra Finance has been able to raise funds at very attractive rates and finances 30-35 percent of M&M volumes. State Bank of India, which had a few months ago decided to withdraw from the segment, is now aggressively financing vehicles." Recently, M&M has been in news for the acquisition of Satyam Computer and later on unveiling its brand identity as 'Mahindra Satyam'. Add to it, Mahindra Holidays has come up with initial public offer (IPO). These exercises might also help M&M to seek the attention of investors. The company is also planning to enter in the U.S. market with the launch of diesel pick-up trucks in the last quarter of 2009. Over the next two years, the company plans to launch products in almost all automotive segments-a 25-tonne M&HCV truck in 3QFY10; a sub-1-tonne LCV by 4QFY10; a successor to the Scorpio in 3QFY11; variants of Xylo in the next 2-3 quarters; and two-wheeler products in entry, executive and premium segment. M&M is also planning to take over 300 Chyrsler dealerships. Mahindra hopes to sell around 45,000 units per year; the competing Chevrolet Colorado and Ford Ranger sold around 55,000 and 65,000 units in 2008.