Buy Mahindra And Mahindra; target of Rs 3682: LKP Research

LKP Research's research report on Mahindra And Mahindra

M&M reported a robust performance in Q1FY26, with standalone revenue rising by 26.1% YoY to ₹341 bn. EBITDA margin was a tad bit lower by 55 bps YoY to 14.3%, led by new launches. PBT stood at ₹44.7 bn, up 31% YoY and 33.7% qoq. Adjusted PAT came in at ₹34.5 bn, growing 32% YoY and 41.6% QoQ. Segment-wise, the Automotive business posted revenue of ₹249.5 bn, up 32% YoY, while the Farm Equipment segment reported revenue of ₹91.8 bn, up 13% YoY. EBIT margin for the Automotive segment were down by 60 bps yoy to 8.9% (10% excluding EVs), while the Farm Equipment segment saw a solid 130 bps expansion to 19.8%, highest since last 16 quarters.

Outlook

We reiterate our BUY rating with a target price of ₹3,682, with the standalone business valued at ₹3,258, based on 25x FY27E earnings and subsidiary valuation of ₹423.