Buy Mahindra and Mahindra; target of Rs 3680: ICICI Securities

ICICI Securities's research report on Mahindra and Mahindra

Mahindra & Mahindra’s (M&M) EBITDA margin at 14.4% was up ~20bps QoQ (vs consensus estimate of 14.7%); auto segment’s EBIT margin was up 20bps QoQ at 9.7%, and FES EBIT margin increased 60bps QoQ to 18.1%. During 9MFY25, M&M’s PV portfolio saw strong growth of ~20%; it is looking at debottlenecking specific capacity for models like XUV3XO and Thar. We expect M&M to continue its strong performance led by its robust UV portfolio, market share gains in both SUV and tractors, improving margin trajectory, and better outlook in FES.

Outlook

Maintain BUY with SoTP-based revised TP of INR 3,680 (earlier INR 3,400), implying 29x FY27E core EPS.