Hold Mahindra and Mahindra; target of Rs 547: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Mahindra and Mahindra

MM's 1QFY20 performance exceeded expectations on all grounds, with standalone (S/A) EBITDA margins at 12.6% (PLe: 12%). We believe, not only MM is highly exposed to BS6 transition and related cost increase challenge (with ~90% of its product portfolio is diesel dependent) but also increasing competion in its core forte (UV2 segment due to MG) to also dent auto segment performance. Additionally, with tractor segment contribution is expected to decline over FY20/21, margin profile too is expected to deteriorate with S/A FY20/21 margins at 12.3%/11.7%.

Outlook

With significant correction in valuations, we downgrade the stock to Hold with price target of INR547 (based in 12x Mar'21E core PE plus value of investment in key subsidiaries).

For all recommendations report, click here

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