Buy Mahindra and Mahindra; target of Rs 3687: Motilal Oswal

Motilal Oswal's research report on Mahindra and Mahindra

Mahindra & Mahindra (MM)’s 1QFY26 PAT at INR34.4b was ahead of our estimate of INR30.7b due to higher other income even as EBITDA margin came in line. While the FES segment’s margin improved 140bp YoY to 19.8%, the auto segment’s margin remained steady at 8.9%, affected by the contract manufacturing margin for its e-SUVs. While MM has outperformed its own targets of earnings growth and RoE of 18%, management remains committed to delivering 15-20% EPS growth and 18% RoE. This ensures sustained profitability and shareholder value. Reiterate BUY with a TP of INR3,687 (based on Jun’27E SoTP).

Outlook

While MM has outperformed its own targets of earnings growth and RoE of 18% in FY24, management remains committed to delivering 15-20% EPS growth and 18% RoE. This ensures sustained profitability and shareholder value. Reiterate BUY with a TP of INR3,687 (based on Jun’27E SoTP).