Buy Mahindra and Mahindra; target of Rs 1053: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Mahindra and Mahindra

We attended M&M’s Farm Equipment Segment’s (FES) investor day in Nagpur (Click here for the presentation), where entire senior management of FES division presented their strategy on a) fortifying core India business, b) expanding scope of business through geographic (global markets) and product expansion (non-tractor mechanization, precise farming etc) and c) maximizing RoCE at consol. FES business. It sees substantial head room for Indian tractor industry and expected it to grow at at-least 8-10% over 5 years and MM to gain market share. MM FES business is transforming from being an India tractor player to global farm equipment supplier.
Outlook
MM is in a sweet spot with strong recovery/growth across all businesses. It is the best bet on the rural recovery in the auto industry. Success in its upcoming new launches and strength of the momentum in tractors and pick-ups will be the key drivers of the stock performance, in our view. The core business (adjusted for subsidiaries’ value) trades at 16.1x/14.3x FY19/20E EPS. Maintain Buy with an SOTP-based (March 2020E) TP of INR1,053.

For all recommendations report, click here

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