M&M shares rise 3% to extend gains for a second day after bullish brokerage calls

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26 Aug, 2025 12:21

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The shares of automaker Mahindra & Mahindra jumped nearly 3 percent on February 25, extending gains for the second straight day on the back of recent bullish calls by brokerages.

The stock has now surged over 4 percent in two days after having crashed over 6 percent on February 21, in line with the selloff in the automotive space on details of Tesla Inc’s upcoming India foray.

Jefferies has reaffirmed a 'Buy' on the stock with a target price of Rs 4,075 per share, an upside of nearly 46 percent from current levels. The brokerage finds M&M's valuation attractive, adding that the core FY26 estimated price-to-earnings ratio of 20x supports an 18 percent EPS CAGR for FY25-27e.

Bernstein has a target of Rs 3,650 for the stock, implying an upside potential of 31 percent. Goldman Sachs has kept a target price of Rs 3,800 in its latest note, implying an upside potential of 37 percent from the current market price.

The rebound in M&M shares comes after a sharp fall the previous week when it clocked its biggest single-day fall in nearly 7 months  on February 21. The sentiment in domestic auto majors took a hit on worries of impact of Elon Musk-led Tesla's entry into India.

Analysts at Jefferies and Bernstein believe the recent decline in the shares of M&M are a buying opportunity.

Jefferies considers M&M a stronger investment case compared to Maruti Suzuki and Hyundai, citing a favourable demand tailwind and rising market share in both tractors as well as SUVs. This comes as Maruti Suzuki and Hyundai both continue to lose share in the passenger vehicle segment.

Part of the worries over Tesla's India entry may have eased after some brokerages assessed the selling price of Tesla in India in greater detail. Tesla's cheapest car model retails for over $35,000 (Rs 30 lakh) in US, which is significantly higher than the average selling price of cars in India, CLSA said in a recent note to clients.