MM reported an in-line operating performance in 2QFY25. EBITDA margin expanded 150bp YoY to 14.3% (est. 13.5%). Farm equipment segment’s (FES) core PBIT margin stood at an impressive 18.7% (+120bp YoY) in a seasonally weak quarter, while auto segment sustained its margin at 9.5% despite the pricing intervention in XUV700. The management has raised its tractor growth guidance to 6-7% for FY25 (from 5% earlier) and maintained its UV growth guidance of mid-teens. We have tweaked our FY25/FY26 EPS estimates. Reiterate BUY with a TP of INR3,420 (based on Sep’26E SOTP).
OutlookThe implied core P/E for MM stands at 29x/25x FY25E/FY26E EPS. Maintain BUY with a revised TP of INR3,420 (based on Sep’26E SOTP).
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