Buy Mahindra and Mahindra; target of Rs 3664: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Mahindra and Mahindra has recommended buy rating on the stock with a target price of Rs 3664 in its research report dated February 10, 2025.

Broker Research

February 11, 2025 / 14:47 IST

Buy

26 Aug, 2025 12:21

Volume

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Prabhudas Lilladher's research report on Mahindra and Mahindra

M&M’s Q3FY25 Standalone revenue grew by 20.3% YoY, in line with consensus estimates, while it was 2.1% lower than PLe. The growth in revenue was aided by strong performance in the Auto and Farm division. Gross profit grew by 23.8%YoY while margin expanded by 72bps YoY to 25.6% (PLe: 26.2%), benefiting from higher volume and mix improvement. EBITDA grew by 33.1% YoY while margin expanded 138bps YoY to 14.4% (PLe: 14.4; BBGe: 14.5%). Healthy overall performance enabled its PAT to increase by 19.1% YoY. The portfolio restructuring of Swaraj brand along with new product launches has led the company to gain market share in the tractors category which has enabled the company to deliver healthy overall performance consistently. The overall momentum remains positive in the farm division while its emphasis on gradually scaling its Farm Machinery business could lead to steady margin performance. Additionally, the buoyancy in the UVs continues to aid its volume growth and the inclusion of EVs to further support the volume growth. Factoring this, we estimate its revenue/EBITDA/PAT to grow at a CAGR of 14.6%/19.6%/13.1% over FY24-27E.

Outlook

We retain our ‘BUY’ rating with a TP of Rs3,664 (previous Rs3,541) valuing it at 27x on its Mar’27E core EPS and Rs229 for its EV business and Rs421 for its listed subsidiaries.

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