Analysts believe that Mahindra & Mahindra’s SUV portfolio is among the strongest in the market and set to drive its onward momentum further.
Mahindra & Mahindra has been seeing steady buying interest based on the company’s outlook for the second half of this fiscal. The company is expecting steady demand growth, in the SUV section. Analysts believe that the company’s SUV portfolio is among the strongest in the market and set to drive its onward momentum further. In fact, the stock price gained nearly 4% in the last five days and climbed 19.60% in the last six months. The year to date gains are north of 20%.
Should you buy, sell or hold M&M shares?
Jefferies: Hold – Target Price: Rs 1,400
“Despite strong auto business outlook, we believe the stock is unlikely to deliver meaningful returns given risk of a cyclical slowdown in tractors. Stock is not cheap at 16x FY25E core business PE vs long-term average of 14x. We broadly maintain our FY24-26 EBITDA estimates but upgrade FY24-26E EPS by 3-6% factoring in lower depreciation and higher financial income. We retain ‘Hold’ with a revised Rs 1,400 Target Price (earlier Rs 1,330).”
BNP Paribas: Buy- Target Price: Rs 1,905
“Through recent model launches, MM repositioned itself with a strong brand identity in the SUV space. While the slow production ramp-up has been disappointing, we see Mahindra & Mahindra’s SUV portfolio to be among the strongest in the industry. This should also help Mahindra & Mahindra’s BEV models, when they start getting launched in the coming years. Also, we think MM’s tractor model launches in the white spaces implies continued tractor market share gain. As SUV production ramps up, we see further tailwinds to automotive margins and expect FES margin to recover, once the one-off impacts are behind. Maintain ‘Buy’.”
Motilal Oswal Financial Services: Buy – Target Price 1,775
“While the outlook for tractors remains stable, we expect the Auto business to be the key growth driver for the next couple of years. Despite deterioration in the mix, we estimate evenue/EBITDA/PAT CAGR of 15%/19%/21% over FY23-25E. The implied core P/E for MM stands at 16.2x/14.8x FY24E/FY25E EPS. While the valuation is still attractive vs. peers, Mahindra & Mahindra has seen a substantial rerating in FY23 as the stock is now trading in line with its five-year average core P/E (against discount of 30% earlier), driven by a strong performance in the SUV segment, market share gain in tractors, and a new launch pipeline in EVs. We reiterate our ‘Buy’ rating on the stock with a Target Price of Rs 1,775 (based on Dec’25ESOTP).”
LKP Securities: Buy – Target Price: Rs 1,801
“We maintain ‘Buy’ rating on attractive valuations; SoTP-based target price stands at Rs 1,801 (Rs 1,466 core business valued at 11x FY25E earnings + subsidiary valuation of Rs335) in line with our assumptions of margin improvement on increase in volumes and value of SUV where we expect market share to bounce back on new launches, 3Ws and LCV segments, growth in FES, production increase offering operating leverage, price hikes and prudent cost reduction measures.”
Choice Broking: Add – Target Price: 1,743
“We expect Standalone revenue/EBIDTA to grow at 14.7/22.5% CAGR over FY23-26E. Additionally, management’s capital allocation to remain on core business will further create shareholders wealth in coming years. We introduce FY26 estimates and roll forward our valuation to Sep-25E. We maintain an ‘Add’ rating on the stock with a SOTP Target Price of Rs 1,743 (based on 17x Sep-25E Core EPS).”
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