Buy Mahindra and Mahindra; target of Rs 3262: LKP Research

LKP Research is bullish on Mahindra and Mahindra has recommended buy rating on the stock with a target price of Rs 3262 in its research report dated November 13, 2024.

Broker Research

November 14, 2024 / 08:56 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

LKP Research's research report on Mahindra and Mahindra

M&M’s net revenues increased by 13% yoy, driven by (1) 1% yoy increase in volumes and (2) 12% yoy increase in ASPs. M&M’s standalone Q2 FY25 EBITDA of ₹39.5 bn (+29% yoy and -2% qoq), was slightly below street estimates due to higher-than-expected other expenses, partly offset by better gross margins. EBITDA margin came in at 14.3% (+140 bps yoy and -60 bps qoq). Gross margins declined by 50 bps on a qoq basis owing to lower mix of the tractor segment. Other expenses grew by 6% qoq despite low single digit volume decline due to higher marketing spends. Adj. PAT grew by 8.8% yoy and 48% on higher other income sequentially.

Outlook

M&M continues to execute well by maintaining leadership position in all three segments, improved return ratio as well as cash flow generation and well-preparedness for an EV transition. Retain BUY with a target price of ₹3,128. (The standalone business is value stands at ₹2,812 @21x FY26E earnings , while the subsidiaries are valued at ₹450).

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