Buy Mahindra and Mahindra; target of Rs 3675: Motilal Oswal

Motilal Oswal's research report on Mahindra and Mahindra

MM reported an in-line operating performance in 3QFY25. EBITDA margin expanded 160bp YoY to 14.6% (est. 14.2%) led by improved mix. The Farm Equipment Segment’s (FES) core PBIT margin stood at an impressive 18.1% (+260bp YoY), while the auto segment’s margin expanded 120bp YoY to 9.7%. We believe MM is well placed to outperform across its core businesses, driven by a healthy recovery in rural and new product launches in both UVs and tractors. We largely maintain our FY26E/27E EPS. Reiterate BUY with a TP of INR3,675 (based on Dec’26E SOTP).

Outlook

The implied core P/E for MM stands at 26x/22x FY26E/FY27E EPS. Reiterate BUY with a revised TP of INR3,675 (based on Dec’26E SOTP).