Nomura lifted its target price on M&M to Rs 4,355 from Rs 4,066, implying a potential upside of 21.6% from Tuesday’s closing level of Rs 3,581.55 on the BSE. Nuvama maintained its ‘Buy’ call with a Rs 4,200 target price, suggesting an upside of nearly 17%.
Nomura stays bullish on growth momentum
Nomura, in its post-results note, called M&M its “top pick” in the auto sector, projecting “industry-leading growth to continue” over the next three years. The brokerage expects SUV volume growth of 18%, 11%, and 7% over FY26–28, backed by upcoming launches across battery electric, hybrid, and internal combustion engine models.The brokerage highlighted that the automaker’s Production-Linked Incentive (PLI) approval for battery electric vehicles offers a “key strategic edge over peers.” Tractor volume growth estimates were also raised to 12% and 5% for FY26 and FY27, respectively. Nomura sees EBITDA margins rising to 14.4%–15.3% during FY26–28, with electric vehicle margins reaching double digits by FY28 as the full portfolio comes under the PLI benefit.
Nuvama sees sustained earnings momentum
Nuvama echoed similar optimism, expecting M&M to deliver revenue and earnings CAGR of 15% and 19%, respectively, over FY25–28. “Auto segment revenue CAGR is expected at 15% (FY25–28) on robust demand and new launches, and Farm segment CAGR at 13% driven by market share gains and supportive policies,” the brokerage said.It added that the company’s return on invested capital (RoIC) is likely to remain above 60%, supported by steady margins in both its Auto and Farm divisions. Nuvama values M&M at 25x Sep-27E core EPS and assigns Rs 942 per share for subsidiaries and investments, maintaining its Buy rating.
Solid fundamentals across segments
M&M reported a 28% year-on-year rise in consolidated profit after tax to Rs 3,673 crore for the July–September quarter, while revenue from operations climbed 21.7% to Rs 45,885 crore.
The automaker continued to dominate across key segments—holding a 25.7% share in SUVs, 53.2% in light commercial vehicles, 43% in tractors, and 42.3% in electric three-wheelers. The company’s annualised return on equity stood at 19.4%.
The Auto segment reported total quarterly volumes of 2,62,000 units, up 13% year-on-year, with standalone PBIT rising 14% to Rs 2,281 crore. In the Farm segment, PBIT surged 48% to Rs 1,684 crore, with margins improving by 220 basis points to 19.7%.
Mahindra Finance, the group’s financial arm, recorded a 45% jump in profit after tax, while Tech Mahindra’s EBIT margin expanded by 250 basis points to 12.1%, contributing to a resilient consolidated performance across the Mahindra Group.
With Nomura and Nuvama both forecasting sustained growth, margin expansion, and steady market share gains, Mahindra & Mahindra remains firmly on the radar of long-term investors. The stock’s recent momentum, coupled with a potential 17–22% upside, signals that M&M’s growth engine, driven by SUVs, EVs, and tractors, may still have significant mileage left.
Also read | M&M Q2 Results: PAT surges 28% YoY to Rs 3,673 crore, revenue jumps 22%(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
