Buy Mahindra and Mahindra; target of Rs 1554: HDFC Securities

HDFC Securities is bullish on Mahindra and Mahindra has recommended buy rating on the stock with a target price of Rs 1554 in its research report dated February 10, 2023.

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February 17, 2023 / 13:19 IST

26 Aug, 2025 12:21

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HDFC Securities' research report on Mahindra and Mahindra

M&M Q3 adjusted PAT at INR 20bn came in above our estimate of INR 18.7bn, primarily due to higher-than-expected other income, even as its operational performance was in line with our estimates. M&M’s performance highlights for YTDFY23 are: (1) steady market share revival in the UV segment every quarter on the back of its new launches; (2) 90bps market share improvement in tractors to 41.4%, without compromising on margins; (3) revival in market share in <3.5T segment; (4) continued leadership in e-3Ws with 65% market share in Q3. Also, it is commendable that M&M has already achieved most of the targets it earmarked a couple of years back (including EPS CAGR, improvement in auto margins, RoE at 18%, calibrated asset allocation etc.) and management has indicated that it is now time to raise its targets from here on. We continue to remain positive on the business momentum given: (1) a strong order backlog for UVs; (2) positive rural sentiment that is likely to be boosted with some freebies from the government in an election year, which bodes well for tractors; (3) focused strides taken to achieve a strong position in EVs; (4) continuing focus on careful capital allocation.

Outlook

Due to better-than-expected volume recovery in tractors, we raise our EPS estimates by 1-4% over FY23-25E. Maintain BUY, with a revised TP of INR1,554/sh (earlier at INR1,528/share).

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